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With the terrible attack in Pittsburgh dominating the news, little attention has been paid to a very, very stupid thing that Donald Trump appears set to do. According to The Atlantic, When Ronald Reagan and Mikhail Gorbachev solemnly signed the Intermediate-Range Nuclear Forces Treaty at the White House, the leaders of the world’s superpowers hailed the transition from an era of “mounting risk of nuclear war” to one marked by the “demilitarization of human life.” Seriously Donald, what is the point of this of this madness?
Unfortunately, as I've noted, Trump seems to shoot from the hip with a very shallow political philosophy. He also seems to have, at least partly, be co-opted by my least favorite people; the permahawks and the neocons. The threat from Russia is wildly overblown, despite what warmongers like Bill Kristol or John Bolton have to say. While Trump didn't run on a peace platform, he did run against full-scale war, interventionism and escalating tensions with Russia. Hopefully he remembers that before a Black Swan takes place in this new and mostly pointless Cold War we're in.
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Are condos ever a good idea to invest in? My latest article for BiggerPockets answers that question. And the answer is: Usually not. And the biggest (albeit not the only) problem is the dreaded HOA fee, Far and away, the biggest problem with holding a condo or co-op is the HOA fee. Now, HOAs do valuable things, so they are by no means useless. They will usually do all exterior maintenance and repairs, as well as pool maintenance if there is a pool. They will almost always pay for trash removal as well. HOA’s provide insurance on the exterior of the building (you will need insurance on the interior of your unit of course). Sometimes, they provide maintenance and replacement of the HVAC and electrical systems. Sometimes they pay for water and sewer. Sometimes they pay for a doorman. It all depends on the HOA in question. This often kills the possibility of holding a condo, but it can also hurt the possibility of flipping a condo as that HOA fee substantially increases your holding costs and eats away your profit. Furthermore, condos tend to be less liquid than houses, so it can take longer to sell.
That being said, there are times when it makes sense to invest in a condo. We own a handful, for example. I go over when it makes sense as well as all the other problems to watch out for with condo investing, so if this is something you're interested in, please check it out. In my latest article for BiggerPockets, I discuss the types of renovations that are better left undone. Yes, these renovations may add a little value to your property, but they are almost never worth the cost. In the article, I reference my own experience as well as a 2003 study from the NAR. (Some people in the comments were giving me a bit of a hard time because the study is 15 years old, but for the most part, I think the results are still true today.) The study found that the following upgrades added the below percentages to the houses' final sales price, all else being equal:
I think that list alone is a good start to what makes sense to add and what doesn't. But I go into much more in the article, so it's worth reading if you're in the business of renovating houses.
I died
With the midterm elections just around the corner, it makes sense to republish this article from SwiftEconomics on voting that I first published just after the 2010 midterm elections (in which I didn't vote). That being said, in the interim I've started to move toward the position that voting is sort of civic duty. That being said, your one vote still doesn't make any difference. Sorry.
I forgot to vote. I meant to vote, really, honest I did. But I didn’t, and that makes me a bad person, I think. At least that’s what everyone on MTV told me. But many people don’t vote, so it’s alright. At least a little bit. In the last Presidential election, with all its partisanship and “change” talk, a whole 44% of eligible Americans didn’t vote and turnout is even lower for the midterm elections (in 2006, 37.1% voted). So I’m most certainly not alone. And hey, at least I didn’t do it on purpose. I forgot. I was busy writing about politics on my blog. But why don’t people vote? Well, actually a better question is why do people vote. Economist Anthony Downs developed a formula for the likelihood of any one person voting, it goes like this: PB + D > C P = Probability a vote will affect outcome B = Perceived benefit if preferred candidate wins D = Social/Personal Gratification from voting and/or civic duty C = Time, effort or financial cost to voting The problem obviously lies with P. I have yet to hear of an election coming down to one vote, so the probability of any one individual’s vote affecting the outcome is effectively zero (although some people seem to be delusional about this as swing states typically have a higher voter turnout). Since P is multiplied by B (and there aren’t many good candidates either for that matter), B will also be zero. That means that the only thing left is personal gratification and/or civic duty. That’s why the “Get out the Vote” and “Vote or Die” campaigns are constantly raging. They’re basically meant to either make people feel good to vote or shame them if they don’t vote (and vote for a certain candidate [wink, nod] of course). See South Park (warning, profanity ensues):
We’re all busy and there is simply not much to gain by voting. It’s the free rider problem; namely it’s certainly better for all of us to have a democracy than a dictatorship, but it’s even better if an individual has someone else do the work for them. Since voting individually will change nothing and there’s no monetary benefit, it’s basically just a waste of time. So why do it?
The civic duty bit is pretty much all we have going for us. And this free rider principle creates an interesting set of other problems as well. 1) Those that care passionately about an issue are more likely to vote than those who don’t. So for example, if there’s a vote to increase the pay of a handful of government workers, most people don’t care. Their taxes will go up a few cents, but those that benefit will see their salaries raised significantly. Thus, they are much more likely to vote for said ballot measure. But after a bunch of this goes on, the dent these tax hikes make collectively to taxpayers’ paychecks start to add up.
Indeed, both of these issues are reasons I think democracy must come second to the rule of law. Perhaps that belief excuses more forgetfulness. Perhaps it wasn’t forgetfulness at all, maybe it was a principled stand against the tyranny of the majority.
Either way, this year P equaled zero… for every single race. No harm, no foul. I've just published my first article for AlleyWatch.com, a website that focuses on startups and entrepreneurs. And so, to fit the theme, my article was on entrepreneurship, or more accurately, the "entrepreneur's most dangerous temptation," Human beings seem to be simultaneously hardwired to both fear change and become bored without it. While we must remember that “the only constant in business is change,” such changes must be addressed in a systematic way. Change for the sake of change or for a sense of excitement can destroy just about any venture you take on. We must be diligent to avoid the dreaded “shiny object syndrome.” Doing a little bit of everything may be more fun, but it won't make you more successful. Diversification may be good for an investment portfolio, but when it comes to building a business, I think I demonstrate overwhelmingly that focus is what is required.
Check it out! So here's another paper I wrote for a graduate class (like this one) that might be interesting to someone out there. I don't see myself trying to put this into practice, but I would like it to actually exist. While I have my tips for getting up early, rousing myself from slumber has always been a challenge in my life. Perhaps this paper will get a few noggins joggin'. I can only hope... According to Sleep Review Magazine, 57 percent of Americans admit that they hit the snooze button when their alarm goes off and 58 percent admit that they stay in bed for at least five minutes after. In Britain, that number is 64 percent. (1) I count myself among these unfortunate people and suspect that the actual numbers are quite a bit higher. People tend to be overly kind to themselves when taking surveys. Most people probably aren’t completely honest about how many times they eat ice cream or how often they go to the gym. They also probably underplay the number of times they hit the snooze button and the amount of time they spend in bed after the alarm goes off. People also care a lot about their mattresses. An entire variety of mattresses are sold on the market, ranging from memory foam, pillow tops, gel, innerspring, air bed, water bed, adjustable bases and latex mattresses. In 2018, Americans spent $14.8 billion dollars on mattresses. (2) Despite the rise of cell phone alarm clocks, the alarm clock industry has also “held stable at around $250M per year in the United States,” according to VoiceLabs.co. (3) People still like having an alarm clock at their bedside to wake them up in the morning… and then wake them up again after they have hit the snooze button. Unfortunately, hitting the snooze button doesn’t actually help someone become more rested. After consulting with various sleep doctors, Kevin Loria noted that, “…From what sleep researchers have said, we can derive an answer. Unfortunately for those of us who enjoy that idea of just a few more minutes, it's not great news… Furthermore, the economist Dan Ariely makes the case that “we're training our minds to be confused by the alarm sound. Instead of recognizing it as the ‘get out of bed’ tone, it's the ‘just a few minutes more' sound — something that can continue indefinitely.” (5) In other words, hitting the snooze button is even worse than useless.
Just think how much time we waste even if we just hit the snooze button every morning for an average of 15 minutes. At that rate, you would lose the following amounts of time doing nothing more than lying in bed:
In other words, you lose close to a year of your life just lying on your bed pretending to rest. If you hit the snooze for 30 minutes each morning, you would lose well over a year. Life is way too short for that! What this all seems to make clear is that there is a large market for people who want a better way to wake up earlier. And Americans are already willing to spend a substantial amount of money each year on mattresses and alarm clocks. So why not combine them into one product that could notably help people get out of bed without hitting the snooze button? This product would integrate an alarm clock into the mattress. You could set the alarm with a remote controller (or cellphone app) that would provide several different options. One of those options would prevent the person from turning the alarm off for at least a certain amount of time after it went off. The alarm would be set based on whether someone was on the bed or not. That way, when the alarm began to ring (or play music) at the time it was set to, it would continue to ring until the person got off the mattress. If the person got off and then lies back down, the alarm would begin to ring again. Oftentimes, all someone needs to do in order to get up is to actually get out of bed for a while. Taking a shower or drinking a cup of water or coffee helps, but just the act of getting up and moving around is enough. It’s that first step, namely getting out of bed, that’s so hard. This is definitely true in my experience as well as many people I’ve talked to. It’s for this reason that many have recommended to put your alarm clock far enough from your bed that you are forced to get up. But even in this case, you can always return to bed after hitting the snooze button. Admittedly, this is something that I have done before. But the mattress alarm wouldn’t allow for this because as soon as you put your weight back on the mattress, the alarm would start to ring again. The mattress alarm would all but force you to get up for a while, which is all that most people need in order to actually “wake up.” Given modern technology, installing an alarm system inside a mattress that was weight sensitive, along with a WiFi connected remote controller would not be particularly expensive. The product would be little more expensive than buying a mattress and an alarm clock separately. In addition, small modifications could be made for each individual’s situations. For example, a mattress could base the alarm on whether there was weight on one side or the other side of the mattress for couples who sleep on the same bed at night. Modern technology would also make it fairly simple for the alarm to record the weight of those who normally sleep on it and only stop ringing when the “correct person” has gotten up. For example, if a 180-pound man and a 120-pound woman sleep on the same bed, the alarm could record their approximate weight. Then, if the man had to be up at 7:00 and the woman at 8:00, the alarm would go off at 7:00 until approximately 180 pounds had been removed from it. Then it would go off again at 8:00 until approximately 120 pounds had been lifted. I believe this product would be very easy to advertise and also easy for consumers to understand and adopt. A television or online video ad could simply follow a standard morning routine at first. The protagonist repeatedly hits the snooze button only to jump out of bed screaming something like “Oh no! I’m going to be late.” A voice will then provide calculations like the ones listed above, noting how much time the average person wastes hitting the snooze button. It will also cite medical research about how hitting the snooze button doesn’t do any good for you. Then it would show the same person using the mattress alarm. He would get up and then try to get back down, but it would go off again. Then he would shake his head and get up. The commercial would then cut to him looking refreshed while drinking a cup of coffee and eating a piece of toast. He would then look at his watch, smile and say something like “Good, I’ve got plenty of time.” Ads with a similar theme could be designed for print media and radio. The product concept would also be rather unique and should get some media coverage in the business and consumer press. Hopefully (although by no means guaranteed), the manufacturer could also secure a patent on the concept. The product should appeal to just about everyone who has trouble getting up in the morning (approximately three out of five Americans according to the survey above). But it should especially interest busy people who are always on the go. These days, that’s a very large market. Business professionals, college students, doctors, lawyers, professional athletes and just about everyone else would be interested in saving themselves 15 to 30 minutes each and every day. Finally, this product wouldn’t require a significant amount of research and development since all of the technological components already exist today. There would not need to be a substantial upfront investment. And furthermore, it would be easy for a mattress company to either create a product line for these or license the alarm from a company that specifically built the mattress alarm component. In other words, the market is already there and the product wouldn’t be particularly challenging to develop. It’s just a matter of bringing them together. In my judgement, if such a product were launched, it could and should be advertised successfully. (1) “57% of Americans Hit the Snooze Button,” Sleep Review, August 27, 2014, http://www.sleepreviewmag.com/2014/08/americans-snooze-button-withings/ (2) “Mattresses,” Statista, Accessed October 17, 2018, https://www.statista.com/outlook/17020200/109/mattresses/united-states (3) Adam Marchick, “Voice is Eating the World: Death to Alarm Clocks,” VoiceLabs.co, October 26, 2016, http://voicelabs.co/2016/10/26/voice-is-eating-the-world-death-to-alarm-clocks/ (4) Kevin Loria, “Most scientists say you shouldn't hit the snooze button — here's how to snooze the right way,” Business Insider, May 21, 2017, https://www.businessinsider.com/snooze-button-effect-on-sleep-2017-5 (5) Ibid
For all the blather about #FakeNews (which seems to me little more than a way to censor opinions you don't like and give the tech giants even more power), CNN may want to stop pointing the finger. The Daily Caller (which I have written a few articles for by the way) recently posted one of the "The List of CNN's Bungled Reporting is a Sight to Behold." A brilliant title for an article that lists 20 of their most recent screw ups, including:
1. SCARAMUCCI SLIP: CNN retracted a story in June of 2016 claiming that former Trump adviser Anthony Scaramucci was under investigation by Congress for his alleged ties to Russia. (RELATED: CNN Retracts Story About Trump Adviser Being Under Investigation)
And on and on it goes, including this trivial, but utterly pathetic "mistake:"
Most of these, you'll notice, have something to do with Russia and collusion and what not. Of course, I'm firmly of the belief this whole Russia thing is wildly overblown (and possibly completely fabricated). All the more reason you would expect a lot of false reporting on it.
But CNN has been easily the worst. Well, OK, maybe not easily. MSNBC, The New York Times and The Washington Post offer some very tough competition. But as far as these outlets number one target, namely Donald Trump, goes (not exactly one predisposed to accuracy either), this tweet seems appropriate to revisit:
Whatever you think of Trump, his presidency has been hilarious to say the least!
The United States is currently in the second longest economic boom of all time, followed only by the expansion between 1991 and 2001. And as they say, "all good things..." Obviously the Dow plunging 800 points last Wednesday certainly doesn't foreshadow good things to come. That being said, timing exactly when we will dip into a recession (and how bad that recession will be) are fool's gold. But it appears more and more likely that we are nearing that point. First, from MarketWatch, The average stock today is trading at 73% above its historical average valuation. There are only two other times in history that stocks were more expensive than they are today: just before the Great Depression hit and in the 1999 run-up to the dot-com bubble’s bursting. MarketWatch also notes that the so-called "Buffet Indicator" (the market value of all equities divided by the GDP) is also nearing historic highs. (It was at 151.3% prior to the Dot.com bubble and is at 125.2% today). In addition, the yield curve is flattening and beginning to invert. "An inverted yield curve is," as Investopedia describes, "an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality." Normally, investors want to be compensated for risks that may come down the line on longer-term bonds. When the yield curve inverts, that means investors are concerned about the short term; i.e. a recession looms. Here's how it looks today (and compare it to 2008 right before the Great Recession):  Inverted yield curves have predicted the last seven recessions!
Of course, a flattening yield curve is not an inverted one and there's no way to be sure it will completely flip (or that the eighth time will be like the previous seven). We always need to be cautious of the guy who has predicted nine of the last two recessions. That being said, the signs don't look good. An after over nine years of growth, we're kind of due. Over at LendingHome.com, I've written one of my most important articles on real estate investing. This is my step-by-step breakdown of how to become a real estate investor. Yes, it's different for everyone. I, for example, started with an internship in my dad's company. I know others that started by investing on the side with their income. And others still who just jumped in. But there are some universal truths. One of which is that eventually, you need to stop learning and start doing. Indeed, feeling overwhelmed is common for newbies who are just getting started, I have heard hundreds of times from new investors how overwhelming it can be getting started in real estate. There is just so much information out there, so many gurus selling get-rich-quick schemes and so many different niches and ways to invest in real estate. Thus, real estate investing for beginners is hard to get off the ground and procrastination is an ever-present temptation. Hopefully, this article can help such newbies as I layout the 8 steps and elaborate on each:
I may be biased, but if you're interested in becoming a real estate investor, I highly recommend you check it out.
 Google really needs to change their slogan right about now. So after Google's creepy, cult-like sob session after the election was leaked, now an 85-page internal briefing with the Orwellian-sounding title "The Good Censor" has been leaked as well. As Breitbart reports, the briefing outlines the difference between the "American tradition," which is basically free speech, and the "European tradition," which "favors dignity over liberty and civility over freedom.” (Translation: Gobbledigook that rationalizes censoring speech I don't like.) Given the political opinions of most of the people in Silicon Valley in general and Google in particular, it should be rather obvious what being "The Good Censor" entails. From Breitbart,
And that's just a glimpse of it. And that's just what's admitted to in this briefing.
As I've noted before, Google--and to a lesser degree other tech giants like Apple, Facebook, Amazon and Twitter--is becoming a sort of "government of the Internet." It is basically governing the Internet and search engine traffic in the way that the East India Company governed India during the period of "company rule" from 1757 until after the Sepoy Rebellion. And given the power of surveillance modern technology enables, it's hard to see how anything could throw off its yoke if Google and the other tech giants become truly authoritarian. We should see to it that it doesn't get that far. |
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