All Forum Posts by: Aaron Taylor

Yes, that's what I was using too:

 Total return 21x for dividend reinvested vs 9.5x for appreciation only.  Looks like I put the .5 on the wrong number the first time.  

 True, the longer the horizon the more dividend stocks outperform usually.  Even if you do 30 year (1989 to 2019) it showed a 21.5 gain via dividend reinvestment vs 9 gain with only appreciation (from a Dow Jones calculator online).  The smaller the hold time, the more appreciation matters, but eventually the dividends will allow it to outperform appreciation only.  If you did one year only, the appreciation would win most years.  The key is that dividend reinvesting allows for buying stock when it's at low points, whereas straight appreciation you never get anything from that (so when 2009 happens, dividend stocks make cheap acquisitions, whereas there's no gain for appreciation).   

Is this true though for stocks?  I think John Bogle found from 1926 (S&P started) to 2007 that if someone put in 10k, one investing for appreciation with no dividend reinvestment and the other reinvesting their dividends, that the one with reinvested dividends would be 33 million vs 1.2 million with no dividend reinvest.  He found that 95% of the returns came from dividend reinvestment.  So people actually were getting rich from dividend reinvestment and not just appreciation.

Nothing gets more favorable terms like talking to a different bank.  Things that were impossible at the first bank are suddenly no problem for them.

Based upon some recommendations here a while back, I used the Home Depot Lifeproof stuff in a couple places.  The install is great, however, I'm not sure if I'd use it again.  Mainly because:

a)  it scratches pretty easy.  Moving appliances especially.  I couldn't believe how easy it scratched.

b)  if you have to remove it temporarily for some reason like water leak getting underneath, it is a complete pain to put back together.  It's an assemble once product that doesn't like to be pulled apart and reassembled.

c)  if you damage one plank, I don't see how you fix it without taking the whole thing apart.  

If I had to do it over again, I probably wouldn't use Lifeproof.  I have concerns about its long term durability.  Like I bought it because I thought it would be more durable and last longer than a wood floor/carpet, I don't think that's going to be the case.  I do think it will hold up better than the wood laminate for sure.  

 Frankly, that's kind of scary.  Making offers with only the gross rents and no other info?  Like all the utilities could be included in the rent and the property could be losing tons of money and your buyer isn't interested in that detail?

That's like offering the same money for two different businesses, both bringing in 10 mil in revenue a year...except for one is making a few mil, and the other is losing a few mil.  Seems pretty risky to make an offer solely on revenue.

I think the main reason they do it is a surprisingly large number of investors don't look into the numbers more in depth. There was something I passed on a while back because the ROI wasn't great, found out from the owner later that the eventual buyers didn't actually even ask about the financials. That kind of stuff kind of blows your mind, but that's why you see pro forma all the time...because a lot of buyers won't ask for the real financials.

One thing that hasn't been mentioned is that if you want to generate passive income later, the faster you can generate income now the easier it will be in the future.  So if you're able to save $1500 to $2k a month with your current job, if you can get a side gig where you put away an additional $1500 to $2k you'll really charge up your savings.  And frankly, it doesn't even have to be a side gig, just something that allows you increase your savings rate.  Say you're renting an apartment now for $1k a month, well if you can buy a duplex or 4 plex and rent out the other units you'll basically cut your living expenses by $1k, making your savings rate $2500 to $3k a month.

I would cut expenses first, as cutting a $1 off expenses is like $1.30ish less that you have to earn because of taxes, depending on your income.  Read @Scott Trench's Set For Life, it's an excellent book about all this stuff.

It all depends on your decisions when you do any of the 4 things.  College just typically has better overall options that don't end up poorly, lol.  Going to a state school and getting an engineering degree will lead to a good income and low debt, but going to a private school with a low paying degree will result in high debt and low income.

The one thing about degrees like electricians is that they all scale really well if you're a hard worker.  You can literally make yourself more successful by working harder and smarter than everyone else.

That doesn't really apply to a lot of college degrees.  College degrees will get you good benefits and a good job at a corporation, but no matter how good you are compared to everyone else there's going to be very little financial difference.

I personally think that the trade schools currently have the best ROI now that college costs have gotten out of hand. Most of the those people are in short supply, electricians, plumbers, etc can make really good money if they're hard working.

That's really what determines whether the investment is worthwhile anyways, work ethic.  Work ethic is the multiplier of the investment you've made in yourself.  Doesn't matter the investment, whether it's college, books, etc, if you learn skills which are in demand and are able to provide them, you're going to be successful.

The funny thing about the poll is that if you drew a line on a graph that indicated 'success', the college grad band would all be banded closely around it.  The tradesman would have a much wider band, where people either make a lot less than college or way more, depending on how hard they work.  Real estate would be even more spread out, and the stock market would have the highest spread...if you picked a stock like Amazon or Apple 15 years ago, it would have easily destroyed any other investment.  Of course, if you picked Sears it would have been the worst investment.  :)

@Jay Hinrichs The article you posted is interesting.  My biggest question with all of this, is where does it end?

I'm a software developer out here in the midwest.  Almost nobody makes $200k out here writing software, and that's the median of a lot of companies in the SF Bay area.  At some point, it's going to make sense for these companies to do more outside of the Bay area, if nothing else just for financial reasons.

Like if you were going to hire 1000 software engineers, at some point it has to come into consideration that it could be up to 100 million cheaper per year to hire them out here than it is in SF, and that gap is only increasing.

Now I've heard stories like "all the top talent is in Cali" and stuff like that, for the most part that's just bull.  If that was true, companies like SpaceX wouldn't be trying to recruit me and others like me around here.  I get contacted all the time to go work at Cali companies, their current scheme appears to be offering big raises to midwest developers in hopes that they'll move and be cheaper than trying to compete with other local Cali developers.  It's not a bad plan, but most people are aware of the cost of living issues of SF, so I think its effectiveness isn't particularly high.

The big cities have always had higher wages, however now it's gotten to the point of ridiculousness in some fields.

The other thing I've started to see now is that companies are starting to become more open about having people work remotely full time from home.   I know of multiple people that's happened to in the past 6 months where I knew of almost zero before that.  So that is also a trend that may pick up steam.  I see some of this as deflationary to larger cities in the same way shipping jobs overseas was deflationary to a lot of jobs like call centers and IT.

I don't know what's going to happen, but from an outside view something doesn't seem quite right when the wages are so far from the average.