What are your goals?

[ukvalueinvestment]

This is going to be a lengthy answer because I will include the WHYs

 

1) Financial Independence - There were two events that really stood out in my life/career that puts me on the path to want to gain financial independence. During 2008/2009, I was a RE investment banking analyst at Citigroup when Citigroup's stock went below $1 per share.  It had traded in the $40-50 range when I started in late 2006.  There were a lot of 40-50 year old relationship bankers in the Private Bank and Smith Barney side who had really long faces during that time.  I was a young guy in my 20s who hustled and worked hard.  The 40-50 year old guys/gals never really developed tangible skill sets such as investing.  But they did develop soft skills like catering to wealthy millionaires.  Their jobs were pretty much glorified concierge services to the millionaires and billionaires that Citigroup served.  In late 2008, a lot of those guys on my floor realized that their skills were worth $200-300k a year only if a large financial institution like Citi continues to exist.  Without the various fiefdoms of Citigroup or another large financial institution, they really had no stock picking, investing, or "profit generating" abilities.  As Citigroup continued to lay off people, I realized that eventually they will get rid of me as well.  But I was in my mid 20s, young, hungry, and hustled, and I had just discovered this guy named Buffet.  So I decided that I was going to the Berkshire meeting in May 2009 if I got laid off.  The 40-50 years old on my floor were terrified of what might happen.  What I learned is that they never really saved and invested.  They became accustomed to the expensive lifestyles of eating out and renting summer houses.  Many of them pay up for rental apartments in NYC. But no one owned anything really.  They mostly spent their $200-300k salaries.  Plus their Citigroup stocks were junk paper at this point.  I made up my mind that day that I will continue to invest in myself and my ability to invest. 

 

The second incidence is more of the cumulative experience of my teenage years.  I have shared my experience of how a Chinese take out restaurant works and how slim the margins are.  I have tried to analyze why my dad behaves a certain way, I believe that if someone is willing to get on a boat and come to the US from China, he's probably got a bit of risk taking genes in him.  Anyway, my dad in his 30s were rather quick to take risk.  We opened a second restaurant when we could've focus all of our energy in our first restaurant.  The 2nd restaurant winded up being a complete flop and we lost about $100k in 90s term.  That was actual monetary loss and about 2-3 years of dividing between an original restaurant that performed decently but lacked attention and this new venture that never took off and sucked the soul out of us.  We finally cut our losses and focused on our first restaurant.  By the time, we came around to that realization, the first restaurant was about 8-9 years old and it needed a refresh.  Given that we just lose $100k, we did not have the cash laying around to invest another $50-70k into a restaurant refresh.  So my parents being the scrappy immigrants that they are, decided to play a bit of game of working capital maneuvering and delay paying our vendors and milked the cashflow.  What they did not understand at the time is that you can kind of work with your suppliers and draw out the payment terms by up to 3 months.  But you can't really mess with your home mortgage, restaurant rent, and various utility bills.  This is kind of common practice in China at the time.  Sometimes you don't pay for 3-6 months and then you pay the entire bill in one fell swoop. 

 

I was about 12 and the best English speaker in my household.  I got a knock on my door one day and a guy from our bank giving us a service notice for home foreclosure.  I was 12 and learned a very early lesson on what happens if you don't pay your mortgage in two consecutive months.  I asked the guy "why would the bank do this to us? We are good for it.  I found out how much legal fees we now accrued etc."  I remember we paid $240k for the house and we had a $180k mortgage on it at about 8-9% interest (yes, early 90s interest rate).  I was terrified that we might lose our house and we maybe homeless.  The worst thing is having to explain this to my parents.  I grew up really fast that day because I learned how foreclosures work.  The terrifying thing about my teenage years is that it was in essence going from one chaotic shit storm to another chaotic shit storm.  Home foreclosure, building department citation for illegal construction without proper permit, health department citation, rent past due, improperly installed HVAC system which may cause pilot light to go out and create an explosion. 

 

My wife and I have talked about how if we buy a house, I want to do what Buffet did and either own it 100% equity or set aside 3-5 years of cash mortgage payment to service the mortgage.  I have a 2 year old son and I never want him to get a knock on the door when he's 12 and have to learn from a stranger what a foreclosure is and why it is a terrible thing. 

 

Surprisingly, my family somehow manage to own a few buildings now.  Due to luck, we correctly bought some rental units in Queens when only colored folks lived in Queens. Rent has gone up quite a bit and interest rates have dropped.  In short, all my siblings own a rental building each.  Over the years, I have grown to appreciate the economics of owning a rental building in NYC.  I used to look at it from the perspective of earning a yield.  However, when you can leverage with 30 year fixed rate fully amortized non-recourse debt, it creates very interesting opportunities.  In short, my cost stays largely flat. But I get to extract 1/3 of a tenant's monthly income for each unit that I own.  It sounds diabolical, but it is the economic reality of owning real estate.

 

I will provide part 2 of my goals in another of my updates

 

Great post, thanks for sharing.

 

Echoing these thoughts - thanks for taking the time to share these stories

 

I loved that post.  Where's part 2 ...?

[SmallCap]

Life Goals:

Be insulted by Trump on Twitter

Have an article appear in Christianity today magazine strongly disagreeing with me

Have my funeral protested by Westboro Baptist Church

- A life well lived!

[Spekulatius]

Life Goals:

Be insulted by Trump on Twitter

Have an article appear in Christianity today magazine strongly disagreeing with me

Have my funeral protested by Westboro Baptist Church

- A life well lived!

 

 

LOL

 

My atheist grandma was supposedly on her deathbed and the catholic run hospital sent a priest to for the last rites. My grandma became furious and noticed that this “ alter Bock” wore a wig amongst all thing. She chased him out swearing in her Berlin accent from her bed calling him out. She lived on for another decade. she is my family hero.

 

Mine are:

1) Stay healthy enough to enjoy good wine and beer

2) Survive another year

3) go to 1) again and repeat as long as possible

[DooDiligence]

Life Goals:

Be insulted by Trump on Twitter

Have an article appear in Christianity today magazine strongly disagreeing with me

Have my funeral protested by Westboro Baptist Church

- A life well lived!

 

Thanks to Spek for bumping this.

 

I needed a laugh & have found another virtual kindred.