2 Year Post-Finale Follow Up

Last updated: June, 2021
Net Worth: $2,006,775
Change from May, 2020: +$777,524

Now, we have finally come to the end. The absolutely-final, no-more-to-come-after-this last post of this blog.

Another Year Gone

Sadly, COVID is still with us. At least now there is a vaccine. Everyone in my family is fully vaccinated and I am fortunate that no one I know got sick or died from it. It's looking like we are over the hump now and things are starting to open up again. People are planning trips once more, including us. After one and a half years of being away, we are finally returning to Las Vegas for our vacation tradition!

We were very lucky to be minimally impacted by the virus. Neither I nor my wife got laid off or even had our work hours reduced. We both switched to working from home full time and my daughter was able to attend school from home as well. Raises were cancelled at my wife's employer, but the virus was actually a huge boon for my employer. We had a record year in 2020 and we are doing even better this year. As a result, I actually got a significant 5-figure bonus for 2020!

All My Teslas Are Paid Off

My last car payment has been made! All our cars are now paid off! Last year, I thought it would take me 1.25 years to finish paying off the last loan and it took about 2 months less than that, partly due to that huge bonus I received.

Here is an accounting from the bank of the total interest I paid on the loan:

Had I paid off my loan on schedule, I would have paid a total of $5,682 in interest. However, I paid the loan off early, taking only 2.75 years to retire the 6 year loan. As a result, I ended up only paying $3,232.56 in interest. I received a $7,500 electric vehicle tax credit on my 2018 federal income tax for buying the car, so that means not only was my car loan free, I came out ahead by $4,267.44. Not bad.

The Tesla Is Still Amazing

It's now been almost three years of ownership and I still love the car. At the end of 2020, we made a second road trip from Washington to Arizona, just like the one I did at the end of 2018. We took the same basic route and stopped at most of the same charging stations.

Much has changed in the two years since our last trip. First, there are a lot more Teslas on the road these days. Second, I noticed many improvements to the charging network. Some of the locations have been expanded with more chargers and some had the new faster V3 chargers installed. And, of course, there are more charging locations in general.

In fact, I've noticed almost all of the Safeway grocery stores near me have installed one or two free electric vehicle chargers in their parking lots. They are level 2, non-Tesla chargers, which means they are somewhat slow and require an adapter for me to use, but free energy is free energy! I can usually gain about a 5% charge while I do my weekly grocery shopping.

Three Years Old And Going Strong

The car has performed admirably for the three years I've been an owner. I currently have 35,173 miles on the car. That's somewhat low for a 3 year old car, mainly because with COVID, I haven't been driving to work at all. Or driving anywhere, really.

The car was rated by the EPA as using 350 Wh/mi (or 35 kWh/100 miles, as their website lists it). As the below image from the car's odometer shows, I'm actually getting 342 Wh/mi over the life of the car. For this statistic, lower is better, so I'm actually coming out ahead of the official estimate.

Maintenance costs are just about non-existent. Apart from getting it washed, I can't even think of any maintenance I had done. Not routine maintenance, anyway. I have yet to even rotate the tires!

Oops. Turns out, that's not true. I had them rotated once, at 6,250 miles. At the time, that was Tesla's recommended guidance. Since then, the official guidance from Tesla for their dual motor vehicles has changed and they now say that the tires only need to be rotated if the tread difference between the front and rear tires is 2/32 of an inch or more (with the rear having less). That hasn't happened yet. I also still have a fair amount of tread left on the tires, although I can see they are wearing. I will probably need to replace them in another 15,000 miles or so.

Total maintenance costs so far: $68 plus tax.

Which isn't to say I haven't spent money on the car. As the above linked-to post shows, I did scrape my wheel once and had to have that repaired at a cost of $350. My paint was also chipped by a flying rock, so I spent $100 on a Tesla paint repair kit to fix that. Apart from car washes, I can't think of any other maintenance-ish things I've had to pay for.

I'm eagerly awaiting the release of the Full Self-Driving functionality, which I purchased when I bought the car. Autopilot has seen vast improvements during my ownership and, from what I've been reading, FSD should perform even better.

Some Interviews

During the past year, I did a couple of interviews for the ESI Money blog. I was Number11 in their Six Figure Interview series and was Millionaire Interview #237 in the Millionaire Interview series.

Investment Performance

My stock portfolio has recovered from the initial COVID drop and has continued to grow.

That chart perfectly illustrates why it's important to practice buy-and-hold in the stock market and not panic sell. Despite my big loss at the beginning of the COVID pandemic in March 2020, by August 2020, the market had recovered. Not only did it recover, but it continued to rise and I'm now at an all-time high.

But it wasn't just not selling and letting the market recover that helped my portfolio performance. I continued to invest and buy stocks during the downturn. This let me buy at depressed prices and, when the market did recover, it supercharged my growth.

Net Worth

May 2020		June 2021

Our net worth took off over this past year, growing by over $750,000! We have surpassed a net worth of $2 million dollars! Amazing. If I wasn't looking at the numbers myself, I would not believe it.

As the above figures show, the growth was mainly fueled by investment gains, but around $60,000 was due to the property value increase of my house. I also paid down over $85,000 in loans. Some of that was principal repayment on my mortgage, but most of that was my car loan. In May 2020, I owed $72,000 on my Model S. Thirteen months later, I owe nothing.

As I previously mentioned, the huge drop in my stock portfolio from when COVID first hit has more than been made up. And with our final car loan paid off, I'm going to be redirecting that money towards investments and paying down our mortgage, so I expect our net worth to continue to grow, possibly even faster.

I first started tracking my net worth in March, 2016. At that time, it was $621,556.05. Now, five years later, it's more than tripled. Not bad!

So as we come out of COVID isolation and life starts to return to normal, things are looking bright. 

Thanks for reading!

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1 Year Post-Finale Follow Up

Last updated: May, 2020
Net Worth: $1,229,251
Change from May, 2019: +$202,172

I did not expect to be writing another blog post, but I felt an update would be in order, given all that has gone on recently.

It is mid-May, almost one year exactly after I wrote what I thought would be my final post. A lot has happened since then. COVID-19 struck, killing and infecting thousands and also decimating the stock market and causing unemployment to skyrocket. My wife and I have been lucky in that neither of us has been laid off, although we suspect some sort of temporary furlough may be in my wife's future. Both of us have been working from home for the past month and a half and my daughter's school has switched to online classes, so she is home full time as well.

This new arrangement has taken some getting used to, to say the least.

This is not pretty - but it's not the end of the world either.

As the above chart shows, our stock accounts have declined in value about $150,000 on paper. This actually represents a rebound from the all-time low of mid-March, which was a decline of close to $300,000. Surprisingly, our net worth has manged to remain above $1,000,000, even with this huge decline.

I'm actually eager to buy more shares of index funds, as I think this downturn is a great buying opportunity. I'm torn between building up a cash reserve in case either I or my wife gets furloughed and investing that cash now to buy while the market is low.

What I Learned From The Coronavirus

I am very grateful I had an emergency fund established. It has provided me with a measure of relief, knowing that we have some funds available should our situation really turn south. However, the stock market crash has made me realize I need to adjust my emergency fund philosophy a bit.

Back in 2 B.C. (before COVID-19), my emergency fund consisted of $2,000 cash and the remainder (about $18,000) invested in low cost index mutual funds and a handful of dividend king stocks. Some people say that investing your emergency funds in the stock market is crazy. However, not investing it in the stock market incurs a huge opportunity cost - you will lose out on all the stock market growth for the (hopefully) rare case when you will need cash someday. The concept of opportunity cost has been written about very nicely over at the Early Retirement Now blog in this post. (Also be sure to read the three other posts he links to at the start of that post.)

So what has happened over the past two months is exactly what many people feared - a stock market crash has really cut into the value of my emergency fund. I'll admit I was worried. The market tanked and my first thought was "Shit! Those goes my emergency fund right when I need it the most!"

But when I stopped to think about it, I realized it wasn't so bad. Yes, if I needed more than $2,000 cash, I would be forced to sell some stock at really low prices. Thankfully, I haven't had to do that so far. But did I actually lose money in my emergency fund with this downturn? Here's a screenshot of my emergency fund stock holdings:

As you can see, my cost basis, the amount of money I paid for these stocks ($18,822.26), is still lower than their current market value ($19,346,74). Even after the huge market losses of the past month, I'm still ahead. Even if I had to sell stocks to raise cash after the market crashed, I still would not have lost money.

However, I'm not completely immune to the emotional ups and downs of huge market swings, so I have decided to adjust my emergency fund strategy a bit. Rather than keeping $2,000 in cash, I'm going to keep an amount of cash equal to two month's mortgage payments, because my mortgage is really the biggest monthly expense that I am worried about covering in an emergency. I'm going to go ahead and accept the opportunity cost of keeping about $5,000 in cash. It's a small price to pay for some peace of mind during the next market crash.

And Speaking of Mortgages...

Right before the coronavirus crisis hit, I had started to refinance my mortgage. Interest rates had dropped a fair amount and my back-of-the-envelope calculations showed I could save a couple hundred dollars a month.

I had a 30 year mortgage at 4.125% and decided to refinance to a 5/5 ARM at 2.75% with no points. It's an adjustable rate mortgage, but the rate stays the same for the first five years. My daughter will be going off to college in 2 or 3 years and there's a high probability we will move shortly thereafter, so I'm OK with just a five-year adjustable rate.

The refi process took longer than normal. Banks are swamped with people wanting to lock in lower rates and then, on top of that, the virus hit, slowing everything down more and causing havoc as people were laid off or furloughed. I was asked about three times during the refinancing process to verify my and my wife's employment status. 😀 Anyway, that all wrapped up a couple days ago and now my monthly mortgage is just over $400 less a month than it was. Part of that savings will be going to paying down my car loan and the rest will be invested in the stock market.

One Tesla Is Paid Off!

This month also featured another milestone! We've paid off my wife's Model 3! We managed to pay it off in just about 1 year - we took delivery in March, 2019 and it was paid off in May, 2020! This was well ahead of the four years I had planned.

Because we paid it off so fast, we actually ended up coming out much further ahead than I had hoped we would. We received a $3,750 federal tax credit (which I collected when I filed our taxes last month). At the time of purchase, I figured we would pay about $3,552 in interest on the loan over four years and we ended up only paying $1,084.37 over the life of the loan, which was one year. That means the purchase price of the car was effectively reduced by $2,665.63 (the $3,750 tax credit minus the $1,084.37 interest charges). To put it another way, we were paid $2,665.63 to take out the car loan!

Now, I am going to concentrate on paying off my Model S by redirecting the money we were sending to my wife's car loan to mine. I estimate we should have our final car loan paid off in about 1.25 years.

Net Worth

May 2019	May 2020

Despite the poor stock market performance of the last two months, our net worth still increased over the year since my last blog post.

The gain came from the usual sources you would expect when you are looking over a full year -  a combination of constantly investing some money each paycheck, paying down our outstanding car loans and mortgage, and property appreciation. Slow and steady wins the race.

Back Into Hiding

That's all for now. I'll likely do one really final update in a year or so when my Model S is paid off. Check back then!

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Net Worth Update: End of May, 2019 (and End Of Blog)

At the end of each month, I post an update of my net worth, including a brief discussion of any notable events that might have occurred. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of May, 2019
Net Worth: $1,027,079
Change from last Month: +$29,192 (!!)

Events Of Note Last Month:

My SQL courses on Udemy generated $56.20 of income. This is my last payment from Udemy and it takes my total lifetime income from my courses to $11,368.76. Not too shabby.

My courses on SkillShare, meanwhile, earned $30.03.

Net Worth Update

We've been flirting with it for months, but now, we finally reached the next achievement:

Our net worth increased by $29,192! We are now officially millionaires!

Sadly, I can't say it was anything specific we did this month to push us over the edge. Turns out, we probably crossed over the one million dollar mark a couple months ago but I never noticed.

About two weeks ago, I received an email telling me the quarterly statement for my wife's retirement plan was available. As I was downloading the statement, I realized I didn't recall seeing this account in Mint.com. I checked and, yup.. I had never added it to Mint, so it was not being included in my net worth calculations. Well, I fixed that mistake!

The value of the account at the time was a tad over $59,000. The stock market has dropped quite a bit since that day, but we were already close enough the last couple months that this "new found" money was enough to get us into the double comma club, even with the decline.

April 2019

May 2019

And That's A Wrap!

With this milestone, I've decided I'm going to stop writing for this blog. My goal has been accomplished - I've got a Tesla (two, even!). My "stretch goal," if you will, was to get a net worth of over a million dollars, which has also been achieved.

I say this is a "stretch goal" because I never really explicitly stated it was something I was striving for, but it's always been in the back of my mind.

Our net worth has increased from the $600,218 it was when I started tracking this figure in February, 2016 to our current value. That's a pretty good-sized increase for three years! I haven't been consciously trying to grow it. Rather, it's happened simply as a natural outgrowth of managing our money better. Creating and sticking to a budget does wonders.

As I looked forward to what I might write about in the future, honestly, there wasn't much that excited me. The next major milestones for me are getting our two car loans paid off. The first should be gone in about one year, then the second two years after that. One of my initial reasons for starting this blog was to provide incentive for me to keep saving for my Tesla. I don't need any such motivation for paying off those loans. I am highly motivated to pay them off ASAP!

Other Topics

A lot of personal finance blogs focus on ways to stay motivated or be frugal. I've never really had a problem doing that, so it's not something I feel I have a lot of experience with.

My wife and I are also fortunate enough to have relatively high-paying jobs. We don't live paycheck to paycheck and don't have to scrape together enough money to make it to the end of the month. Through luck or hard work or (at least in some part) all the societal privileges that come with being college-educated Caucasians, we've never been in that situation. As a result, I don't feel like I can authoritatively tell others in that situation how to live. It's easy to say "save at least 10% of your income," but doing that while you are barely making ends meet has to be real hard and it would be hypocritical of me to tell others how to do it.

I written about many of the financial topics I wanted to - credit cards, stocks and stock options, paying down debt, things to look for to get as much value as you can. Anything else I have to say on those subjects would just be repeating myself. (What else can be said about mutual fund expense ratios besides "they suck" and "get them as low as possible?")

I've even shared some of my darkest secrets here.

The reality is there is nothing difficult or complicated about personal finance. It's easy to make it as complicated as you want. For example, you can dive into annuities or other esoteric instruments. But the reality is no one needs those to get rich. Once you have learned a handful of basic concepts, you'll have more than enough knowledge to increase your wealth.

Tomorrow There'll Be Sunshine...

Rather than start repeating myself, I'm going to close the door here and move on to something else. I'm not sure what yet.

Thanks for reading. I hope this blog has been useful, educational, and at least somewhat entertaining. I've enjoyed sharing my experiences and had fun writing the blog. I hope you had fun reading it. I hope you find success in your financial journey and I hope that you will eventually find your way to the land of hope and dreams.




Grab your ticket and your suitcase
Thunder's rolling down this track
You don't know where you're goin' now
But you know you won't be back
Darlin' if you're weary
Lay your head upon my chest
We'll take what we can carry
And we'll leave the rest
Big wheels roll through fields
Where sunlight streams
Meet me in a land of hope and dreams

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Work - Now With More 401(k)!

Last year, I wrote about how I willingly went to work for a company that did not offer a 401(k) plan. At my previous company, I was contributing 19% to a 401(k), so when I took my new job and lost that option, I just started putting 19% of my pay into a regular brokerage account for saving.

Unfortunately (or fortunately, depending on how you look at it), my salary was high enough to disqualify me from contributing to any kind of IRA, so I just put it into a regular, taxable account.

A year later, my company now offers a 401(k) plan! In the competitive, tech-centric job market of the Seattle area, if a company wants to attract and retain good talent, it needs to offer such a basic benefit and the lack of a retirement plan was a serious drawback when it came to hiring.

To my surprise, they plan they came up with is surprisingly good.

• They offer a Roth 401(k) option, which I took. (But keep in mind, the company match portion still goes into a regular non-Roth 401(k) account.) 
• Employee contributions are matched 20% up to the first 5% of your salary.
• The plan investment options are pretty good. There are several low cost mutual funds available, including some Admiralty share options from Vanguard funds. There are also retirement date target funds.
• Employees are automatically enrolled at 3% of their salary unless they opt to change that.

This is actually a double win for me. As I mentioned in the above linked post, when I accepted this job, I was able to get an additional $5,000 salary because of the company's lack of a 401(k). Now that they offer one, I get both benefits!

I enrolled and am contributing 5% - just enough to get the full company match - and I'm continuing to save 14% to the brokerage account I was contributing to before. This was simply to let me retain some flexibility.

While my company's 401(k) plan offers good choices, I like having access to that additional 14% of my pay at any time. I can also adjust that amount more easily as my budget needs change. I have a wider range of investment options outside of the 401(k) plan. Yes, I may be paying a bit more in taxes, but that is the price I have to pay for the increased flexibility.

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Video Recording Issues

My Tesla software was upgraded a month or two ago and one of the new features I got was Sentry Mode. When this mode is activated, the car will monitor its surroundings while parked. If a threat is detected, such as someone leaning on the car, attempting to break in, keying it, pulling a hit-and-run in a parking lot, etc., the car will start recording video using its cameras, as well as display a warning on the large screen. If that doesn't deter the offender, the car will eventually start blasting classical music. It's sort of a car alarm on steroids.

I've been turning Sentry Mode on pretty much whenever I park my car outside my house now and, occasionally, when I get back in, I will see an alert telling me some sentry events have been recorded. When I get home, I plug the USB drive into my computer to see what happened.

This is how I noticed that my cameras seem to be malfunctioning. The recorded video is often glitchy and corrupted.

Here's an example from my front camera:

This doesn't only happen to the front camera. I've also seen it happen from the left camera.

And here is another issue I've seen with the left camera. The picture degrades over the course of the 1 minute recording:

Sometimes, the recording from the left camera is simply an empty file.

At this point, I'm not sure if the issue is with the camera or something related to the video recording process. Autopilot, which uses the cameras, seems unaffected. I've tried two different USB drives for the recording media and the problems do not go away.

A discussion at Tesla Motors Club seems to point to the problem being related to the USB drive the files are stored on. One person said he got rid of the problems by using a drive with a metal housing and he thought it might be related to better heat dissipation. I can't say I've noticed if my drive is hot when I take it out, but it's possible.

It's also possible the quality of the USB drive is an issue. Drives that have a faster write response time might not have problems. I've been using cheap USB drives I received for free as promotions from somewhere or another, so who knows what their quality is. I ordered one that the poster at TMC said worked, a device from SanDisk, which is a reputable company. We'll see how that works.

In the meantime, I've scheduled a service appointment for June 1, so if the new USB drive doesn't fix the problem, we'll see what Tesla says.

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Net Worth Update: End of April, 2019

At the end of each month, I post an update of my net worth, including a brief discussion of any notable events that might have occurred. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of April, 2019
Net Worth: $997,888
Change from last Month: +$47,360 (!!)

Events Of Note Last Month:

My SQL courses on Udemy generated $68.65 of income. My courses on SkillShare, meanwhile, earned $31.28. This income will be dropping over the next month or two. I wrote about why here.

We've made good progress on paying down our two car loans. I obtained one loan last September and the other two months ago in February, so neither loan is more than 7 months old. The outstanding balances have been reduced by over $10,000 each - for the smaller loan, that amounts to about 25% of the original loan amount. While we are paying more than the minimum each month, these big reductions were due to a work bonus and a nice tax refund this year, so I don't expect any more big drops any time soon, just a slow and steady reduction.

Also - Happy May Day!

Net Worth Update

Our net worth had a crazy big increase: $47,360! Holy smokes!

March 2019

April 2019

This took me quite by surprise. In digging in to the details, I can see the gain came from three sources:

• A roughly $5,000 increase in our home value. I have no control over this. 
• A $10,000 decrease in our outstanding loans (combined car loans and mortgage). This I do have control over. When you look at our all our loans, we're paying down about $3,000 in principal each month. Any reduction in our outstanding loan principal translates directly into an equal increase in our net worth.
• A roughly $35,000 increase in our stock portfolio. Another item I have no control over. I've mentioned before that we've crossed an inflection point in our stock portfolio - that point where market fluctuations have more of an effect on the total value of our portfolio than our contributions - but this is probably the most extreme example of it yet. Fortunately, this was a swing to the upside! But Mr. Market giveth and Mr. Market can take away. We'll see if the gains stick around to next month.

Credit card debt saw a big increase this month, but that is because we took a vacation to Washington D.C. I put all our expenses on our Chase Freedom credit card to earn cash back awards, but I've got money saved in the bank to cover them. That payment goes out next week.

So, so close to that seven figure milestone! I was hoping we'd get there this month, but no such luck. This is the closest we've ever been....

If you have any questions or suggestions for topics, please drop me a line in the comments section!

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Think You're Good At Spotting Scams? I Bet I Can Fool You.

Photo by Ahmed Syed  

Not A Real Prince

Scams are usually easy to spot. You know that Nigerian prince did not randomly pick you to help get his $10 million dollars out of his bank or to avoid government taxes. They're easy to spot, in part, because they ask you to pay a small amount of money in exchange for a larger amount of money. You’re probably good at ignoring these scams. You may even pride yourself in being too smart to fall for them.

Beware. People who think they are too smart to fall for scams are often some of the easiest people to fool.

Can You Spot This Scam?

Let’s play a little game and see if you can spot the scam.

You get an email from someone, let’s call him Sammy The Amazing Stock Picker, claiming to write a stock trading newsletter that has a 100% success rate in picking stocks. He’s analyzed the market and has come up with a secret proprietary formula that can correctly predict when a stock is going to go either up or down. There’s lots of mumbo jumbo about technical analysis, trading patterns, candlestick charts, trend lines, etc. It all sounds very impressive and scientific. For just $1,000, you can subscribe to this newsletter and get stock picks that are guaranteed to make you money!

But he doesn’t expect you to believe him. To prove his formula works, he’s going to give you a stock tip today. He predicts that the stock of Company ABC will go up in three weeks. You are intrigued. You’re not going to buy the stock, but you decide to watch it and see what happens.

Three weeks later, you are surprised to discover that the stock of Company ABC did, in fact, go up. Huh. You could have made some money if you listened to that guy’s tip. Still, you reason, he could have just gotten lucky.

The next day, you get another email from Sammy. He points out that his prediction was correct. He’s asking you again for $1,000 to subscribe to his newsletter, but he understands you may still be reluctant. To convince you, he’s going to give you another tip. His proprietary formula predicts that stock XYZ is going to go up in 2 weeks. Once again, you decide not to invest, but you’ll track the stock for 2 weeks.

Wow.. Two weeks later, you are surprised to find that stock XYZ did go up. In fact, it went up quite a bit. You could have made a couple thousand dollars had you bought some shares. You start to think Sammy might be on to something.

Sammy sends you another email, again reminding you that he has now correctly predicted an increase in two stocks. His formula surely works. He really wants to share this information with people so he can help others get rich and stick it to those greedy Wall Street traders and again asks you to subscribe to his newsletter for $1,000. In case you still doubt him, he passes along another tip. This time, his formula says stock LMN is going to drop in 18 days. He recommends you short the stock. (Shorting is a way to make money when the price of a stock goes down.)

You are really intrigued now. Sammy is 2 for 2. Maybe he is on to something. Still, shorting a stock can be dangerous, so you decide to hold off and again just monitor the price. Eighteen days seems pretty specific. His formula must be really accurate.

Sure enough, exactly 18 days later, stock LMN has dropped. This is amazing! Sammy has correctly picked not 1, not 2, but 3 winning stock trades in a row! You are slowly starting to believe there might be something to Sammy’s secret formula after all. Still, $1,000 is a lot to cough up. On the other hand, you could easily recoup that cost plus more with just one trade...

You are a smart guy. You think this still might be a scam, but how? Sammy is correctly predicting stock prices in the future!

You get two more emails from Sammy, each time he recommends a stock and each time, the stock does exactly what he predicts. OK, you think, he’s for real. No one can correctly predict five stock trades in a row!

You start to think of all the money you can make following Sammy’s recommendations. In just a couple of months, you can quit your job. You can retire early. You decide Sammy is somehow legit and you send him $1,000 to subscribe to his newsletter. After all, you’ll make that money back and more just following his first tip!

Congratulations! You’ve just been scammed.

You never get his newsletter. Or even worse, you get a newsletter with a hot tip and you invest a couple thousand. Somehow, the trade loses money. You’re stuck with a 75% loss. Sammy doesn’t return any of your emails. The newsletters stop coming. You feel sick.

What happened? You had proof that Sammy had a magic formula! The odds of successfully picking five stock trades in a row are tiny. How did you get scammed?

Hubris

You got scammed because you thought you couldn’t be scammed.

You thought you had proof that Sammy was a genius. Did you stop to ask yourself why Sammy would be selling a newsletter to people if he could correctly predict the stock market? Why wouldn’t he just keep his secret formula to himself and make millions? If someone could really do this, why would he share that information?

No, you saw what you thought was proof and you started to get greedy. You started to imagine all the money you could, against all odds, make just by following someone’s advice and without any thought or work on your part.

You fell victim to one of the classic blunders! The most famous of which is “never get involved in a land war in Asia!” But only slightly less well-known is this: “If something sounds too good to be true, it usually is.”

So how did Sammy do it? How did he know those five stocks were going to move in the direction he said they would?

He didn’t. It was pure luck.

How Sammy Did It

When you got Sammy’s first email, you were one of 10,000 people Sammy sent it to. What you didn’t know is that 5,000 of those people got an email saying the stock would go up. The other 5,000 got one saying it would go down.

Sammy purposely picked a volatile stock, so he could be pretty sure there would be some serious price movement one way or the other. Whichever way the stock moved, some people would believe Sammy correctly predicted it.

After three weeks, Sammy emailed the 5,000 who got the email that correctly predicted the price of stock ABC. Of those, he now told 2,500 people that stock XYZ would go up in 2 weeks and he told the other 2,500 it would go down. Sneaky Sammy can’t lose!

After two weeks, 2,500 people now believe Sammy can predict the future. Some people have decided to send him $1,000 at this point and Sammy starts raking in the dough.

He now does the same thing with his next mailing to the 1,250 people who got the email that correctly predicted stock XYZ and he recommends the LMN stock trade. Then he does it once more to 625 people. With each mailing, he gets several more people to send him $1,000. By now, ol’ Sammy has made tens of thousands of dollars and he eventually disappears from the internet.

Well, probably not. He probably just made some new email accounts and started the process over with a new batch of suckers.

Stay Skeptical

Things are not always what they seem. No one can predict the future, even if you have what you think is incontestable proof. Don’t be so sure of your ability to spot scams that you willfully see only what you want to see.

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After Six Years, Time To End My Online Courses

Photo by Matt Botsford

Back in 2014, when I started this blog, my goal was to get enough passive income to pay for a Tesla. That goal, of course, changed, but passive income is still a great thing to have and to strive for.

One of my passive income streams has been from teaching online courses. These are courses I created and recorded, uploaded to a couple instructional sites, and then collect money from each month from students who enroll. It's a pretty sweet deal.

Sadly, I think it's time to end those courses. The courses are getting a bit long in the tooth. I made four of them, all about a database product from Microsoft called SQL Server. That's what I've built my career on and what I know, so it made sense to teach others about it.

Why I'm Taking Them Down

Like all technology products, SQL Server is evolving and changing. My courses were made with the latest version of SQL Server at the time - SQL Server 2012. Since then, versions 2014, 2016, and 2017 have been released. SQL 2019 is due to be released soon. While the information in my courses is still applicable, the graphical interface has changed and new features have been added. In short, someone watching my courses today would think the videos are old. And they are. The first one was made 6 years ago.

I've seen my sales start to drop off. The last couple of months have only seen 10 - 15 new students per month. New reviews are rare - maybe 1 or 2 per month. I've come to the conclusion that I need to either make new courses with updated content and using the latest software version or take the old courses down before people start leaving bad reviews because the software shown is old.

Making the courses was a lot of work. Hours and hours writing the scripts, creating demos, then a couple of weekends recording it all. I'm not really looking forward to doing that again and, truthfully, I don't have the burning desire to any more. I already have my Tesla. My wife and I are in a much better place financially than we were six years ago. My passive income stream is now mainly from stock dividends.

Another (small) factor that contributed to my decision to take the courses down was paperwork. Neither of the sites that sell my courses provide tax forms at the end of the year. This means I have to manually track all the payments they make to report them on my taxes. Further, the IRS considers this self-employment income, meaning I also have to pay the employer share of Social Security and Medicare taxes as well as my own share. For a while, I was also making quarterly estimated tax payments. When I was making $200 to $400 per month, I was fine with this. Now however, the amounts are so small, it's more trouble than it's worth. I've got too many other demands for my time.

My courses were available on two platforms: Udemy.com and Skillshare.com. Udemy provides lifetime access for students who have purchased courses, so I can't actually delete my courses there. Instead, I'm setting my courses to private. This means they will no longer show up in any search results. The only way new students can enroll is if I give them a link.

Udemy Almost Final Results

So how much money did these courses make for me? Was it worth it?  Without a doubt, yes.

As I have pointed out before, my total initial investment was a $149 high quality microphone (which is even cheaper now). All the other tools I used, video editing software, graphics programs, etc. were free. I either used freeware products or program such as PowerPoint, which I already owned.

From that initial $149 investment, on Udemy, I have earned over $11,000!

My total figure should go up another $120 or so because there are still two months Udemy has not paid me for yet. (They pay one month behind because they offer students a 30 day money back guarantee.) So all in all, I'll have made about $11,500. Not too shabby.

As the above graphic shows, I had almost two thousand students and my average rating was 4.4 out of 5 stars. I've helped students in 81 different countries:

That's something I'm proud of.

SkillShare Almost Final Results

I earn money differently on SkillShare. Whereas a student on Udemy pays for each course and a portion of each student's purchase price goes to me, a SkillShare student pays a monthly subscription fee and I am paid for each minute of my courses a student views. So on Udemy, earning money is all about recruiting new students. On SkillShare, it's all about getting students to actually watch your courses.

Based on this income model, I'm going to leave my courses up on SkillShare since I don't have to rely on attracting new students to earn money. Because students pay a monthly fee for all content on the site, I don't think any students would leave a bad review if my courses seem out of date. After all, it's more or less free to them with their monthly subscription. In fact, user reviews seems unimportant on SkillShare. As you can see below, I've only had one review out of almost 300 students.

I've talked with SkillShare's tech support and it is unclear to me that they will actually pay out minutes viewed once I deactivate my account. So I don't really see a downside to just letting the courses stay up.

My courses have not been on SkillShare as long as they have on Udemy. I think I first posted them in November 2017 and I've made $633 so far.

SkillShare was never meant to replace or outperform Udemy. It was simply a new platform I heard about and, since I already had all the courses created, I just thought I'd put them up there as well and try to get some more money from them. More money for zero extra work.

The End Of An Era

I'm somewhat sad to be taking these courses down. It was crazy fun getting money each month for doing basically nothing. I remember sitting on a beach in Hawaii four years ago and getting email notifications of money coming in. It's a great feeling :-)

I'm still not sure if I'll make new courses. If I do, they most likely won't be about computer-related topics. I've pondered making some financial-related ones, but can't seem to come up with any good ideas. Does anyone have any suggestions?

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On Vacation!

Taking some time off this week as we head to Washington D.C. for spring break! We're taking a train across the country, spending a couple of days in D.C., then flying back home. See you next week!

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Net Worth Update: End of March 2019

At the end of each month, I post an update of my net worth, including a brief discussion of any notable events that might have occurred. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of March, 2019
Net Worth: $950,528
Change from last Month: +$15,683

Events Of Note Last Month:

My SQL courses on Udemy generated $59.91 of income. My courses on SkillShare, meanwhile, earned $47.10. I've decided to scale back on my courses. More details on that next week.

Taxes

Well, this year was better than last year. For the last three or four years, I've had to pay thousands of dollars in taxes come April, despite dramatically increasing the amount withheld from our paychecks each year. For 2018, we're actually getting a $6,199 refund! Yay!

If we didn't have the Tesla $7,500 tax credit, we would have owed about $1,300. My accountant attributes this to the fact that the IRS changed the tax withholding rates last year. Less money is being withheld each paycheck due to the decrease in tax brackets, but when they set the withholding rates, the IRS did not account for the loss of many deductions - such as the $10,000 deduction cap on state and local taxes, mortgage interest, etc. You may have heard about this last year. There were a ton of stories advising people to adjust their tax withholding.

Given that we are having an extra $7,200 in taxes withheld during the year, I didn't bother adjusting our withholding. Between that extra and the $7,500 Tesla tax credit, I figured we'd be OK.

And we were. We're still getting money back. I'm not going to bother adjusting my withholdings for 2019 either because the purchase of my wife's Tesla qualifies us for a $3,750 tax credit for 2019. If things stay the same for 2019, we should get a refund next year as well.

Net Worth Update

We had a big increase in our net worth this month: over $15,000!

February 2019

March 2019

Our Property category increased due to the new car we bought at the beginning of the month. Our loan amount also went up, as we took a loan for the vehicle. The rest of the gains came from increases in our stock portfolio and our home value.

Oh, and hey... Look there... We're sneaking up on a net worth milestone....

If you have any questions or suggestions for topics, please drop me a line in the comments section!

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Here's To Well Defined Goals!

Photo by Vek Labs on Unsplash

Over the past 7 months, we have purchased two new Teslas – a Model S P100DL and a Model 3 Dual Motor Long Range. Doing so meant we took out a total of $148,100 in loans. Our combined minimum monthly car payments are $2,209. That’s a lot. It’s more than our house payment was a couple years ago when we were living in Arizona.

We are actually paying $2,625 a month towards the loans. That’s what we have budgeted and we can, thankfully, afford that much while still putting aside enough in other savings accounts for other things such as emergencies, etc.

You might think that taking on such a huge monthly payment would worry me a bit, and you would be right. The future is uncertain and this is one of the reasons we have an emergency fund built up.

Yay For Debt?

But, now that the loans have actually been taken out, in a strange sort of way, I welcome them. You see, back before we got the cars, we were saving $2,625 each month towards their purchase. So having that monthly loan payment hasn’t really changed anything from the perspective of our budget. The only difference is I’m sending the money to the loan company instead of to a savings account. (I’ve already explained that the EV tax credits we received more than cover the interest costs of the loans, so we’re not losing money by taking out loans and paying interest.)

When I was saving up our funds, the money was going into an account and accumulating. Saving seemed like something that was just going to go on forever. Now that the money is paying down a loan balance, the end is in sight.  By having a loan, I’ve got a very well-defined end point.

It's All About That Bass Motivation

It turns out, I get more excited spending money to pay down the loans than saving the same amount of money for the cars in the first place. I know this is because the finish line is so specific. While I was saving up money over a period of years, my target was always changing. As time went on, the cost of the Model S kept rising, making it seem like I was not making progress. Likewise, I never fully defined what kind of car we planned on getting for my wife. I just threw money into an account each month and figured we’d decide on something when we got a decent sized amount saved up. I never defined what a "decent sized" amount was.

Both of those goals were very fuzzy. It’s hard to get excited about progress towards a goal when the goal isn’t clearly defined.

Well, we’ve now got a clearly-defined goal – two paid off loans!

My wife’s loan has the smallest balance ($44,100) as well as the highest interest rate, so that’s the one I will concentrate on paying off first. This is really exciting to me because I have been saving for a car for her in some form or another for at least 3 or 4 years. Paying that loan off means freeing up money in our budget that had been allocated for years! Once her loan is paid off, the money we sent towards that will get redirected to my car loan, increasing that payment by over 66% and enabling that loan to be paid down even faster!

And when those two loans are paid off – jackpot! We will have freed up a crapload of additional money each month. No more car payments. No more saving towards a car. Instead, we’ll have an additional $2,625 each month that can be used to save and invest. That is truly exciting to me! That is a goal I can really get motivated to work towards!

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Audew 12V Portable Air Compressor Pump Review

This week, I’m posting a review of a new portable air pump I recently received. Although it was provided to me by the manufacturer, the comments and opinions here are my own. Please see my disclosure page for full details.

Back when I was 16 years old, I got my first car – a small, used pickup truck. It cost $4,000 and I paid for half with money saved from working summers and my parents paid the other half. It was great to finally be able to drive myself places and just head out on my own without my parents. When I was 16, we were still in the Dark Ages – there were no cell phones and the Internet wasn’t around. Us computer nerds dialed up to local bulletin board systems to post messages on forums. Those were dark days, indeed.

The lack of cell phones meant if your car broke down somewhere, you had to walk to find a pay phone – another long gone relic – to call someone to come help you. To avoid that, I had some basic repair tools that I kept in my car. A spare tire and jack, of course, but also a small air pump that I could plug in to the cigarette lighter in case I needed to add air to my tires. That thing was bright red and had a short 1 foot long hose to connect to the tire. The hose was so short that if your car was stopped with the valve stem at the top of the wheel, the pump could barely touch the ground when the hose was connected. It was tiny and loud as jack hammer and took forever to pump up a tire. I also used it inflate beach balls, basketballs, air mattresses, and anything else that was too big for me to blow up manually. Using it was somewhat scary because if you ran it for more than 10 minutes, it got really hot and started to smell like something was burning. You had to let it cool before you could pick it up to put away.

I transferred that pump from one car to another as the years passed and other cars came and went. Believe it or not, it was only a few months ago, when I was transferring items from my old Prius to my new Tesla, that I threw it out. After hauling that thing around for almost 35 years, it was time to say goodbye.

Finally, An Upgrade

But I am pleased to say I now have a replacement. The Audew Portable Air Compressor is a portable 12V pump that is perfect for stowing away in your car for emergencies. Unlike my old compressor, this one features a digital readout of the pressure. You can also set it to your desired pressure and it will automatically shut off once that pressure is reached. Easy-peasy.

The unit comes with a 2 foot long hose that can connect directly to a tire valve stem and three other adapters – two for inflating things like rafts and mattresses and a needle for basketballs, volleyballs, and the like, as well as a spare fuse.

As you can see from the pictures, the unit is fairly compact. It’s also lightweight and easy to carry. The air hose is stored on one side of the unit and the 12V power cord on the other. The air hose is sufficiently long enough to connect to a tire without any issues. There are two lights on the top of the unit that can be set to either flash or remain on continuously.

I let a bit of air out of one of my tires and used the pump to bring it back up to 45 PSI. Here’s a video of it in action. The pump bounces around a bit as it runs, but that might be due to the sloped and pebbled driveway I was using it on.


The lights point straight up, which may be good as a warning sign to other drivers at night when they are set to flashing. If you need to shine them on something, the pump is light enough to pick and point the lights wherever you need, even while it is in operation.

My sole complaint is the storage mechanism for the power cord. As shipped, the cord fits nicely in the side of the pump. But I know there is no way in the world I’m going to get it to fit that nicely ever again. As you can see below, the connector end slides nicely into an interior pocket, but the cord just ends up something of a mess that you have to jam into the slot. I would like to see a couple of posts that you can wrap the cord around.

The connector stores away nicely.

The power cord, not so much.

All in all, I think the Audew 12V Air Compressor is a good deal for the price. I plan on keeping one in my frunk for emergencies.

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Model 3 Delivered!

Deliverance

Wow... The process of buying my wife's Model 3 was so much smoother and faster than what I went through buying my Model S! We pulled the trigger and ordered the car on February 19. We drove it home on March 2 - just 11 days later. And we could have actually had it as early as February 26, only seven days after ordering it, but we weren't ready that soon. (Because both of our names will be on the title, we both had to be present to pick it up and we just couldn't find a time we were both available.) Compare this with the 6 weeks it took to get my Model S!

I suspect the increased speed is because the options for the Model 3 are severely limited. Our only options were the paint color (5 choices), interior color (2 choices), wheel size (2 choices), and the enhanced autopilot feature. All cars have the enhanced AP hardware installed, so it's just a software configuration to turn it on. There is no difference in the build process. This means there are very few changes between each Model 3 produced, so they can roll off the assembly line faster.

The trade-in process was much easier as well. No photos of the trade-in were required, contrasting with my trade-in experience. As I mentioned last time, it seems how thoroughly they inspect your trade-in is dependent on how expensive your new car is.

As was the case with my Model S, the timing worked out such that we didn't need to waste money on licensing the old car for another year. My wife's registration on her Prius was set to expire 17 days after we traded it in. Unlike some states, Washington does not give you a refund if you sell or trade your vehicle before the registration expires, so this saved us $156.

I did run into one hitch. We were scheduled to pick up our car on Saturday, March 2. On March 1, we got an email asking us to log into our account and verify our pickup location and that we were trading in a car. This was the day after Elon Musk announced the $35,000 Model 3 was now on sale.

Friday morning, the Tesla website was getting hammered. I couldn't log in to verify our purchase info! After trying to about 30 minutes, I finally got logged in, only to discover my order was not listed! Considering I had just wired my deposit over the night before, that was a smidge disconcerting, to say the least.

I called Tesla and they said the site was swamped and they were having the same issues on their end accessing it. The person I spoke with said links weren't going to the correct pages and other weird behavior was happening. He confirmed he still saw my order and that they had people working to get the website fixed. He suggested I try again that evening.

After about 2 hours, I tried again and was able to get in and confirm my order.

The pick up went just as smooth as when I picked up my Model S. We signed some paperwork, handed over our old car keys and got our new Model 3 keycards. This time, the car was parked outside, instead of in the showroom like mine was. There were several other people there picking up cars, so space was limited. Since we already knew how most of the stuff worked, there was no need for anyone to give us an overview, so we got in and drove away!

Shiny!

Accessories

Once again, I ordered the all weather interior floor mats. We also bought a second high power wall charger. This will be wired in a load balanced configuration with my existing wall charger so they can share the same 100 amp circuit.

Due to the trade-in, we actually have an extra $5,000 or so we could have applied to our down payment. I didn't want to do this for fear of messing up the loan. I was afraid if the loan amount changed, even if it went down, the approval process would have to start over again. Granted, it went super fast and was completely transparent to me, but I didn't want to do anything that might delay the purchase.

The extra money will be used for the second high powered wall connector and its installation. There should be a couple thousand left over, which will go towards paying down the car loan and I'll send it in as soon as I get the electronic payment process set up.

My wife has been enjoying the last couple of days with the car. We're still configuring some of the options like the HomeLink garage door opener and connecting her phone, but it should be all set up the way she likes it in a few days!

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