Splinter in My Thumb September 2020 Recap

September 2020 was a month of mixed experiences, where personal challenges and broader economic uncertainties intertwined. As I navigated through the month, a persistent sharp pain from a splinter lodged in my thumb served as an unexpected metaphor for the discomfort of the times. Despite my attempts to address it, the splinter remained, a reminder of the importance of resilience and adaptation.

While I had originally planned to embrace a slower pace during this month, the reality of life during a pandemic often propels us into action, even when we intend to unwind. This reflection serves not only as a personal recap but also as a historical account to share with my family, ensuring that these unique moments are remembered.

Family Life During a Pandemic

The experience of parenting during September was marked by both challenges and joys. My son missed out on a full month of preschool, and while I initially anticipated feeling a sense of FOMO (fear of missing out) for keeping him home, our circumstances shifted that perspective. One of the highlights was arranging a playdate with a classmate, which was a significant step in addressing his social needs amidst lockdown restrictions.

Throughout the month, we engaged in various educational activities, focusing on subjects like math, Mandarin, and Japanese. I also introduced him to one of my favorite songs, Listen to Mama by Jay Chou, which beautifully conveys the values of respect and care for one's mother. Teaching him the chorus has been a delight, and I look forward to the day he fully understands the lyrics.

Moreover, we embarked on field trips that provided valuable learning experiences. Visiting places like Chinatown and the TransAmerica building allowed us to connect the dots between the history of San Francisco and our present lives. It was a surreal experience to play with my son in a playground near my former workplace, illustrating how quickly circumstances can change.

• Engaged in educational activities covering math and languages.
• Organized playdates to foster social interaction.
• Visited significant landmarks to enrich his understanding of local history.

My daughter, now nine months old, reached a major milestone by learning to crawl. This new phase has required us to childproof our home thoroughly. It's heartwarming to see her joyful spirit, and I cherish these moments as a parent. Balancing attention between my children has been a learning curve, as I strive to ensure both receive the love and care they need.

Understanding Finances in a Volatile Market

The financial landscape in September was challenging, particularly for major indices like the S&P 500 and NASDAQ, which saw declines of approximately 5% and 10%, respectively. Despite these fluctuations, I remain optimistic about economic recovery, anticipating that a new stimulus package will emerge to stabilize markets and support families.

While I enjoyed significant gains in stocks like Apple and Tesla earlier in the year, the uncertainty surrounding the upcoming presidential election added to the market's volatility. The potential for ballots to remain uncounted until mid-November further compounded worries about economic stability.

Tracking Net Worth Growth

According to Personal Capital, my net worth experienced minimal growth of just 0.2% in September, primarily due to disappointing stock performance. However, year-to-date, my net worth has increased by approximately 11.5%, which aligns with my target of a +10% annual growth.

The relatively flat net worth was offset by consistent income from online ventures and passive investments, but this realization can be disheartening. Seeing little net worth progression despite a month of hard work is a tough pill to swallow.

Mobilizing Cash Reserves

After making strategic investments in March, I adopted a more cautious approach as the S&P 500 reached 3,000 points. My focus has shifted to building cash reserves and paying down mortgage principal. Currently, I have around five years' worth of living expenses in cash, significantly higher than my usual comfort level of one year.

This substantial cash reserve positions me to consider purchasing another rental property. The demand for rental income remains strong, presenting an opportunity in the market, especially in areas like San Francisco.

Owning rental properties not only serves as a financial asset but also creates lasting memories for my children. The experience of growing up in various properties can foster a sense of responsibility and appreciation for real estate as they mature.

Exploring Passive Income Streams

As of the third quarter of 2020, my passive income stood at approximately $298,971. However, this figure includes my original capital investment, complicating the assessment of true gains. Given my investments in private funds, it’s challenging to break down the exact returns until year-end.

I estimate that around $100,000 of the total is my original principal, which means my actual passive income is likely closer to $200,000. This situation highlights the importance of distinguishing between capital gains and original investments to evaluate performance accurately.

Examples of Opaque Distributions

• Received $30,555 from my venture debt fund, estimating $15,000 as original capital. Recorded 75% of this amount ($22,914) for my passive income chart.
• From my real estate crowdfunding portfolio, I received $191,679 this year, with an estimated $100,000 being original investment. Recorded 75% of the distributions through Q3 ($143,757).

As the year progresses, there’s a possibility I may not receive additional distributions from my private funds. In that case, I’ll need to reassess the figures to reflect actual income. Nevertheless, I expect continued income from other sources, including rental properties, dividends, and bonds.

Financial Samurai Updates

In September, I reverted to my regular posting schedule of three times a week after previously ramping up to four. This adjustment feels right, allowing me to maintain a balance between content creation and personal well-being. Over the last year, I’ve managed to increase revenue, yet the pursuit of financial success doesn’t always equate to personal happiness.

Pillar Post of the Month

The standout post this month was The Proper Safe Withdrawal Rate: 4% Rule Is Outdated. This article gained traction, being featured on Bloomberg and MarketWatch, and prompted important discussions around financial planning and tax-efficient income generation. Despite some criticism regarding the suggested withdrawal rate, I remain steadfast in my approach.

Lessons from Criticism

• Working at McDonald's as a teenager taught me the value of hard work and financial appreciation.
• Making the decision to leave finance for blogging and travel was met with skepticism, yet it remains one of my best choices.
• Facing ridicule for my interests and career shifts has shaped my resilience and determination.
• Offering bullish perspectives during market downturns has often invited criticism, but staying true to my analysis has proven beneficial.

Through these experiences, I’ve learned to embrace criticism as a tool for growth. It’s essential to focus on building wealth and securing financial independence rather than seeking validation from others.

September Reflections and Future Goals

Overall, September felt like a precursor to the challenges that lie ahead as we approach the end of the year. Environmental issues, such as California's wildfires, added to the unpredictability of outdoor activities. As we move into October, I’m eager to take my children to visit museums and re-engage with activities that had been on hold.

We remain cautious and vigilant regarding health protocols, but there’s a renewed sense of optimism. With greater knowledge about COVID-19, I have faith that our resilience will see us through. The upcoming election may also bring a sense of closure and clarity, regardless of the outcome.

Setting Goals for October

• Focus on improving my physical health by incorporating push-ups and sit-ups into my routine.
• Consider obtaining or converting a term life insurance policy.
• Dedicate more time to bonding with my daughter.
• Assist my son in learning to ride a scooter.
• Plan a family trip to Lake Tahoe.
• Maintain my posting schedule on Financial Samurai and produce additional content.

How was your September? What aspirations do you have for October and beyond? I’m embracing the productive spirit of September, aiming to make the most of this transitional month.

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