Personal Finance Goals - 2021

Coja Petrus Uscan

Hummingbird
Gold Member
2. www.blockfi.com
Even if you want to own zero bitcoin, since they are lending in the crypto world, they can award higher interest. So, you can get 8.6% interest for cash deposits, pays out monthly. They offer 6% interest on bitcoin too(!!). If you wanted to hold your liquid cash before purchasing excavating equipment or something, and don't want to risk fluctuations in the stock market for example, this could be a good option.

The issue with Blockfi is you are required to put it in for terms, minimum of 6 months. Most defi projects let you lend stable coins on a flexible term; and plenty with rates around 12%. I got about 4.5% in a month on Binance, i.e. nearly 50% a year on the first month, but think it's down now. Nexo has 10% with no term, 12% if you get paid out in their token, which is worth more than fiat IMO. Youhodler is 12%. Fulcrum has a very stable defi rate of about 12-13%, so does Yearn.
 

username

Ostrich
Gold Member
-rental costs quite a bit per day, a couple days rental can pay the equipment payment on owning something

I like your idea about working for yourself with your own equipment. Something I didn't think about but it's a great idea.

I've been leaning towards buying a bunch of equipment and renting it out. Like you said, after a few days of rentals most equipment is already paid for amd after that the equipment has a huge return.

Get a few different machines and vehicles and rent them out. In my town there are already quite a few so that would be a challenge competing against them but I probably could under cut them on price.

A 26ft ladder rents for $33/day but cost $320 to buy. A skid steer rents for $250/day and the same one can be bought used for $22k to $27k. Etc..
 

paninaro

Pelican
Renting equipment is very possible. There are a few issues:
-not being familiar with a particular machine, you need some time to get used to operating it effectively
-rental costs quite a bit per day, a couple days rental can pay the equipment payment on owning something
-rental location is nearly an hour away, so add two hours of time for transport to any job, two hours that are not billable.

I would likely rent some specialized equipment, but I think it makes sense to start out with a main piece of equipment and supplement with rental as needed until it seems necessary to purchase something else.

Buying equipment is very expensive, but it does hold its value much better than things like cars and trucks. So, I should be able to get most of my initial investment back out if I find this wasn't a good idea.

Generally, it sounds like you have a good plan. When I read your first post, I immediately thought to myself: "Why doesn't he just rent the equipment?"

It seems like your plan is to tie up a lot of your funds in equipment, which means that's an illiquid asset. It also means you can't get started earning money today, because you haven't saved up enough to purchase the equipment.

Renting is a great way to start off a business, because you are only paying rental fees when you are actually making money. If you buy, you're stuck paying for that equipment (maintenance, depreciation, etc) whether you have work lined up or not.

I don't know your field well, but I would suggest strongly considering looking at renting to start. It could be from a rental place, or find someone who owns such equipment and strike a deal to rent it from them during the weekend when they aren't using it. Either way, you'll only be renting it when you actually have work lined up. Sure, your profit per job will be lower compared to if you own the equipment, because you have to pay the rental fees, but it means you could start making money tomorrow effectively.

Then as you grow, at some point it becomes more cost-efficient to own your own equipment for sure.. but probably not at the start.
 
I might just buy precious metals with the stimulus buffet that we're promised this year. Besides that, no goals whatsoever.

Combining all the money giveaways with the very real possibly of congress cancelling student loan debts in a year or two, it would be very very hard to miss any of your short term personal finance goals.

Not to say that there won't be hell to pay for all this, but that's a little later.
 

redbeard

Hummingbird
Moderator
2. My side hustle as real estate agent - only do a few transactions per year

2. Close at least 3 transactions. This isn't that much work, but until dotted lines are signed it is a total coin flip. And I don't want to sell my soul with a million advertisements, so it's all word of mouth. My client base is taking a while to build.
Do you think you could elaborate on this?

Real estate is absolutely booming. I'm not ready to be a buyer yet, but I'd love to profit off of the explosion. Acting as an agent, using word of mouth, seems to be a fantastic way to make money without risking much capital.
 

Dr. Howard

Peacock
Gold Member
Do you think you could elaborate on this?

Real estate is absolutely booming. I'm not ready to be a buyer yet, but I'd love to profit off of the explosion. Acting as an agent, using word of mouth, seems to be a fantastic way to make money without risking much capital.

For real estate, one of the hinges is getting your full broker license. My understanding is that if you just have your provisional license you have to work under a full broker for X period of time. Once you have your full license you can become totally independent and set your own commission.

If you can set your own commission, go and undercut established brokerages and offer your services to a real estate investor you can feed you multiple deals in exchange for reduced rates.

Disruption of the existing commission practices is the biggest area for gains in the real estate market as a non investor.

For reference, I have a relative in Canada who is a full broker who went to flat fee commission and the local MLA board equivalent tried to strip him of his license and run him out of town when he did it. Part of the issue is that because there are usually 2 brokers in every deal, if they don't like you you can get blacklisted and no agents will bring clients into your properties.
 

redbeard

Hummingbird
Moderator
For real estate, one of the hinges is getting your full broker license. My understanding is that if you just have your provisional license you have to work under a full broker for X period of time. Once you have your full license you can become totally independent and set your own commission.

If you can set your own commission, go and undercut established brokerages and offer your services to a real estate investor you can feed you multiple deals in exchange for reduced rates.

Disruption of the existing commission practices is the biggest area for gains in the real estate market as a non investor.

For reference, I have a relative in Canada who is a full broker who went to flat fee commission and the local MLA board equivalent tried to strip him of his license and run him out of town when he did it. Part of the issue is that because there are usually 2 brokers in every deal, if they don't like you you can get blacklisted and no agents will bring clients into your properties.
What's involved in the full broker process? Is it manageable for people with 9-5's?
 

Dr. Howard

Peacock
Gold Member
What's involved in the full broker process? Is it manageable for people with 9-5's?

It really varies by state, the last one I checked on was Wisconsin https://www.wra.org/Education/Careers/Broker/Wisconsin_Broker_License_Information/ to become a full broker you need to have one of the following:
  • be an associate for 2 years under a full broker and have enough 'points' which are various completed transactions. (8 residential sales for example)
  • have 20 hours of college education on real estate or real estate law
  • be an attorney (be an attorney seems to be the escape clause for just about any kind of state license)
In TN it is much different, I think you just need 120 hours of additional education and another exam.
 

Coja Petrus Uscan

Hummingbird
Gold Member
There is a crypto real-estate platform called Propy: https://propy.com/browse/

I don't know much about it, but seems some agents are using it, with the promise of increased profits due to streamlining and automation.

One thing I do know about them is that they broker deals between buyers and sellers, either in crypto or crypto to cash. They have to be contacted by email to request this. So if you are in the position of wanting to buy a home, but only have crypto it is something to consider.
 
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cosine

Sparrow
Do you think you could elaborate on this?

Real estate is absolutely booming. I'm not ready to be a buyer yet, but I'd love to profit off of the explosion. Acting as an agent, using word of mouth, seems to be a fantastic way to make money without risking much capital.
For real estate, one of the hinges is getting your full broker license. My understanding is that if you just have your provisional license you have to work under a full broker for X period of time. Once you have your full license you can become totally independent and set your own commission.
If you go with ReMax, Keller Williams, Berkshire Hathaway, Coldwell Banker...etc, any big name, the typical costs are:
1. 6% off the top of your commission
2. 60-40% split, or 70-30% split, or 80-20%, etc, depending on how much you sell. Anyone new gets an unfavorable split. Top people get 90-10% or even 95-5%.
3. A monthly fee. Could be $0, could be $2000, but if it's high then that tends to come with lots of leads and training. And these types of places expect you to be full-time.

The deal I have with my brokerage is way different. They do not require you to be full-time, it is "barebones" set up, you are mostly on your own.
1. 70-30% split only for your first three transactions, then you get 100% split.
2. $250 fee per transaction
3. $25/month fee
4. They also have a strong trainer who you can pay for continuing education classes, and if you run into trouble and need lots of help you can work out a deal with him. He's fantastic.

My other expenses:
$30/month for contracting software
$15/month for DocuSign
$55/month for MLS fees. They are lower in some areas.
- CPA fees
- Whatever other incidental expenses I have. Your car has to be clean. Printing documents, wear nice shoes, etc.

This means that my main hurdles are simply marketing/obtaining clients. It was a struggle at first for sure. There's a really big difference between your friends hearing, "____ just got his license" and "I bought my place through _____ last month"

Also, I'm not actually a "Realtor". The National Association of Realtors(NAR) is a totally outdated relic of old-style of business. It used to provide the MLS/list all of the homes. Now that is done by tiny local tech companies and websites like Zillow, Redfin, Realtor.com all just aggregate data from a few hundred MLS's. The NAR says they are about "ethics" now, but individual states' Real Estate Commissions are the entities that actually penalize and prosecute people who break laws, screw over clients...etc. I don't need to pay $1500/year for a useless entity.

If you can set your own commission, go and undercut established brokerages and offer your services to a real estate investor you can feed you multiple deals in exchange for reduced rates.

Disruption of the existing commission practices is the biggest area for gains in the real estate market as a non investor.
The real estate business is fantastic at keeping itself in business. With stupid % commissions.

I do get to set my own commissions with my current deal, and I have less liability and responsibilities. Since I already get a great commission split, I charge regular fees and then give clients rebates.
 
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Dr. Howard

Peacock
Gold Member
If you go with ReMax, Keller Williams, Berkshire Hathaway, Coldwell Banker...etc, any big name, the typical costs are:
1. 6% off the top of your commission
2. 60-40% split, or 70-30% split, or 80-20%, etc, depending on how much you sell. Anyone new gets an unfavorable split. Top people get 90-10% or even 95-5%.
3. A monthly fee. Could be $0, could be $2000, but if it's high then that tends to come with lots of leads and training. And these types of places expect you to be full-time.

The deal I have with my brokerage is way different. They do not require you to be full-time, it is "barebones" set up, you are mostly on your own.
1. 70-30% split only for your first three transactions, then you get 100% split.
2. $250 fee per transaction
3. $25/month fee
4. They also have a strong trainer who you can pay for continuing education classes, and if you run into trouble and need lots of help you can work out a deal with him. He's fantastic.

My other expenses:
$30/month for contracting software
$15/month for DocuSign
$55/month for MLS fees. They are lower in some areas.
- CPA fees
- Whatever other incidental expenses I have. Your car has to be clean. Printing documents, wear nice shoes, etc.

This means that my main hurdles are simply marketing/obtaining clients. It was a struggle at first for sure. There's a really big difference between your friends hearing, "____ just got his license" and "I bought my place through _____ last month"

Also, I'm not actually a "Realtor". The National Association of Realtors(NAR) is a totally outdated relic of old-style of business. It used to provide the MLS/list all of the homes. Now that is done by tiny local tech companies and websites like Zillow, Redfin, Realtor.com all just aggregate data from a few hundred MLS's. The NAR says they are about "ethics" now, but individual states' Real Estate Commissions are the entities that actually penalize and prosecute people who break laws, screw over clients...etc. I don't need to pay $1500/year for a useless entity.


The real estate business is fantastic at keeping itself in business. With stupid % commissions.

I do get to set my own commissions with my current deal, and I have less liability and responsibilities. Since I already get a great commission split, I charge regular fees and then give clients rebates.

Awesome information, so is there a minimum licensure standard in your state? Does it have the 2 tiered system where there is an 'associate' and a 'full' broker?
 

cosine

Sparrow
Awesome information, so is there a minimum licensure standard in your state? Does it have the 2 tiered system where there is an 'associate' and a 'full' broker?
Yes. The progression for my state:
1. Sign up for a RE licensing class for $300 or so. I did it self-paced in 2 months, mostly studying on weekends while working my 9-5.
2. Finish the course, take a test at a state-run testing facility.
3. Find a "managing broker" that you like, then together you file paperwork and pay something like $1000 for the license itself. You are now a "broker licensee", and also pay $150-$200 annually in E&O (Errors in Omissions) insurance. The license was good from March 2018 - Dec 31, 2021.
4. Start closing deals. Your first 3 need to be "supervised" so someone is going to take a cut.

After two years minimum, and some number of required transactions, you could apply to run your own brokerage and be a "managing broker".



Now if I bought a house with an FHA loan, you could do it putting 3.5% down. If I collect a 3% commission and wrap it into the down payment, that means I only need to come up with 0.5% in cash, and closing fees. I'd have a larger mortgage and PMI, but still, I can't wait to make my own RE investments this way. Owning low-rate fixed mortgage debt on residential housing in a desirable area is a fantastic position to be in. Doing it during money printing, and your debt becomes worthless!
 

wowowow112

Chicken
My goals:
1. Just started a new job in IT that pays well. I can easily save 60% monthly. Goal - don't screw it up and make myslef comfortable there. With the big sulprus of money I should be able to do the following:
2. I've accumulated a lot of debt over the years - start paying it off aggressively.
3. Invest. I have some crypto, but I want to invest more (long term).
4. Create some financial cushion, minimum 3 months to cover my expenses by July.
 

Mr Gibbs

Woodpecker
What would you guys say is a good place to be at financially in order to start raising a family?

I was thinking being a home owner or at least en route to be.
Owning a safe vehicle
Having a set amount of money in savings, cash etc

That’s the way I’m looking at it but I don’t know specifics. And as with most things the rapid changes between the generations leaves a lot of our parents or grandparents advice null and void. Not all obviously but it’s kind of hard for them to understand where the younger generations may be coming from.

As with a lot of things the older generations have failed to pass on, nobody taught me or I would say most millennials how to save, be frugal and/or start a family, we were kinda left to the wolves on this unfortunately.

But that conversation would probably best be saved for a thread of aggrieved young people who don’t know anything or have any skills.
 

redbeard

Hummingbird
Moderator
What would you guys say is a good place to be at financially in order to start raising a family?

I was thinking being a home owner or at least en route to be.
Owning a safe vehicle
Having a set amount of money in savings, cash etc

That’s the way I’m looking at it but I don’t know specifics. And as with most things the rapid changes between the generations leaves a lot of our parents or grandparents advice null and void. Not all obviously but it’s kind of hard for them to understand where the younger generations may be coming from.

As with a lot of things the older generations have failed to pass on, nobody taught me or I would say most millennials how to save, be frugal and/or start a family, we were kinda left to the wolves on this unfortunately.

But that conversation would probably best be saved for a thread of aggrieved young people who don’t know anything or have any skills.
As someone who recently had to make this decision, I'd say the best answer is to take a good look at your budget and see if you can squeeze in a stay-at-home wife and a kid. This is obviously a vague answer, but it depends so much on where you're at and what type of life you and your family will live.

While I was engaged I took a good long look at my then-fiancee's finances, and calculated an estimate of how much it would cost for me to house her. Groceries, student loans, toiletries, supplements, clothes, hobbies, cell phone, books, etc. Then I estimated $300-$500 per month per kid. I'm sure that number will spark controversy, but that's what I recall from this Brave The World interview. I put these numbers together and figured what I would have to do financially to fit this in the budget.

But also, as some of the older guys can confirm, you're never really ready to start a family. There's always something else you want to achieve first, so don't let preparedness push you off too much. Don't let arbitrary goals like owning a home, x amount of savings, etc. limit you, because when you meet the right girl, all of that flies out the window.

Despite that, it's probably a good idea to follow the Dave Ramsey Baby Steps to make sure you're prepared. The first four (and most pertinent) are:
  1. $1k savings
  2. Pay off CC & student loan debt
  3. Save 3-6 months of expenses
  4. Invest 15% of your income
 

Dr. Howard

Peacock
Gold Member
As someone who recently had to make this decision, I'd say the best answer is to take a good look at your budget and see if you can squeeze in a stay-at-home wife and a kid. This is obviously a vague answer, but it depends so much on where you're at and what type of life you and your family will live.

While I was engaged I took a good long look at my then-fiancee's finances, and calculated an estimate of how much it would cost for me to house her. Groceries, student loans, toiletries, supplements, clothes, hobbies, cell phone, books, etc. Then I estimated $300-$500 per month per kid. I'm sure that number will spark controversy, but that's what I recall from this Brave The World interview. I put these numbers together and figured what I would have to do financially to fit this in the budget.

But also, as some of the older guys can confirm, you're never really ready to start a family. There's always something else you want to achieve first, so don't let preparedness push you off too much. Don't let arbitrary goals like owning a home, x amount of savings, etc. limit you, because when you meet the right girl, all of that flies out the window.

Despite that, it's probably a good idea to follow the Dave Ramsey Baby Steps to make sure you're prepared. The first four (and most pertinent) are:
  1. $1k savings
  2. Pay off CC & student loan debt
  3. Save 3-6 months of expenses
  4. Invest 15% of your income

I'm also going to vouch for the Dave Ramsey baby steps. They worked for me. They are easy to do and when you go into 'thrift' mode to pay off your debts you find that it's not that terrible of a lifestyle in short bursts. My wife an I look back fondly on the time when our entire budget for the month to spend on fast food, or entertainment (like say a red box movie) was $20.

When you clear out your debts and then have the choice as to what to do with that free cash flow, it makes you look at your thrift budget and it feels wasteful to go back to spending it on all of the junk that you used to.
 

tomzestatlu

Kingfisher
Buy a real estate property - This is on my mind for longer period and I feel big unability to feel satisfied with myself, until I will do it. Nobody in my family ever owned anything and I want to be the one, who makes it, even though prices are ridiculous and it would put 30 years debt on me. I am 28 and I would like to do it before 30. Just to get a mortgage is something very difficult for young person, because you need to accumulate a lot of money to get it (I rely on crypto).

Build financial pillow - Having at least 3-4 salaries (~5k$) on my bank account to be prepared for enexpected costs (just this autumn I had experienced how important it is). Then focus on investments.

Figure out how to earn money on the side - This is something I am trying for a years and haven´t succeed yet, beside doing bouncer on the side. I was kinda lost and few weeks ago I have decided to go into programming. I am not an IT guy, but hopefully it will at least extend my view of possibilities.
 

bucky

Ostrich
What would you guys say is a good place to be at financially in order to start raising a family?

I was thinking being a home owner or at least en route to be.
Owning a safe vehicle
Having a set amount of money in savings, cash etc

That’s the way I’m looking at it but I don’t know specifics. And as with most things the rapid changes between the generations leaves a lot of our parents or grandparents advice null and void. Not all obviously but it’s kind of hard for them to understand where the younger generations may be coming from.

As with a lot of things the older generations have failed to pass on, nobody taught me or I would say most millennials how to save, be frugal and/or start a family, we were kinda left to the wolves on this unfortunately.

But that conversation would probably best be saved for a thread of aggrieved young people who don’t know anything or have any skills.
I'm managing to provide for a wife and a few small children right now and I think what you mentioned would be ideal, about owning a home and a reliable car. At least six months of emergency funds saved up, as well as some kind of retirement fund. Solid medical insurance would be another thing. Also, be prepared to not have much, if any, money for extras like vacations once you have kids. If I take a week off from work, it's definitely a "staycation." Be prepared for big medical expenses from time-to-time too. The odds of those increase several times once you're providing for a wife and a kid or two. Assuming you're in the US, even if you have good health insurance an ER visit will cost you about 1k, and my family seems to average one of those a year.

Worth it though. There's nothing better than good family with a good wife and kids you love.
 
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