Seppia's journal

Where are you and where are you going?
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Seppia
Posts: 2016
Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: Seppia's journal

Post by Seppia »

Thank you all for the kind words
classical_Liberal wrote:
Tue Jan 28, 2020 3:09 pm
He's so cute, I wonder if I can find baby sized Korn shirts at the thrift store?
One of my best friends took care of this :lol:

Image

Jason

Re: Seppia's journal

Post by Jason »

Seppia wrote:
Tue Jan 28, 2020 2:58 pm

Image

Mostly shit.
I know if I woke up to that creepy legged dog staring over my shoulder I'd be shitting my pants too.

Congrats.

2Birds1Stone
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Re: Seppia's journal

Post by 2Birds1Stone »

Congratulations Seppia! This is wonderful news.

rube
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Re: Seppia's journal

Post by rube »

Congrats Mr and Mrs Seppia!

7Wannabe5
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Re: Seppia's journal

Post by 7Wannabe5 »

So cute!!!!Congratulations!

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jennypenny
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Re: Seppia's journal

Post by jennypenny »

Wow, congrats!!

I'm glad your wife is ok. Sounds like she should get a gift on his birthday every year too. ;)

Tyler9000
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Re: Seppia's journal

Post by Tyler9000 »

Congrats, Seppia!
Seppia wrote:
Tue Jan 28, 2020 2:58 pm
Mommy is fully recovered from a fairly hard delivery where she lost 50% of her blood. My wife is clearly the real badass in the couple so she looks fantastic already. Had I lost 50% of my blood I would have curled into a ball and requested to be spoon fed for the next 15 years probably.
As traumatic as that must have been, I've gotta say that's incredibly metal. She rocks! 🤘 :twisted:

(But in all seriousness, I'm glad she's ok.)

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Ego
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Re: Seppia's journal

Post by Ego »

Congratulations!

Oh the places he'll go!

McTrex
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Re: Seppia's journal

Post by McTrex »

What a surprise! Congratulations!

Smashter
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Re: Seppia's journal

Post by Smashter »

50% of blood! :shock: Pregnancy is insane.

Major congrats! Last I remember you mentioning anything baby related I thought it was in the context of you not being able to have kids.

My wife and I have been trying for a while now with no luck and it can be discouraging, so this is great to see.

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Seppia
Posts: 2016
Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: Seppia's journal

Post by Seppia »

January - February Update

My god has life changed for us in the last three months!
The baby is growing well, he's been mostly very kind to us: he isn't too complicated to deal with and tends to sleep well at night.
Both DW and I are ecstatic, we are so grateful.
Then this virus hits and I go from being away 50% of the time to working from home. I am not used to being home so often and I'm surprised how well this is going in general.
I was afraid this dramatic change could have impacted the relationship with DW as I've always traveled 50% of the time since we started dating 11 years ago. We have established some sort of equilibrium I was afraid was going to be tilted, but instead we are as happy as we've ever been together.
I am the luckiest person on the planet.

It is extremely weird to see how quickly Italy has been transformed. This country, for all its flaws, has always had a very high quality of life, with people smiling, being loud, and a generally very connected social tissue.
Seeing empty streets and squares still feels odd
I've already posted this pic in the COVID thread, but it impresses me every time I see it.

https://ibb.co/PCX4Bq6

I was also able to sneak in a last trip to japan in late February, before the company imposed a complete travel ban, so there's that. I really love Japan.

Financially, January was a relatively low savings rate month (43%), due to a few reasons I explained in the above post with the baby picture.
February was instead very good, at 81%, due to total absence of one offs and, in general, very low spending. March will probably look very similar.

I have started again investing in March, buying relatively aggressively on the way down. It is always painful when you buy and then after a couple days prices are another 10% lower, but I remind myself that
1- it's impossible to only buy at the bottom and
2- I've been building up liquidity by foregoing investments for the last few months, so I'm coming out ahead anyways
Another reason why I feel ok drawing down on my recently-padded cash cushion is that I'll have a fairly sizeable bonus paid end of April (equal to about 4 months of salary).

As of today, I have lost the equivalent of three years' salary in the last three weeks. I am impressed how little this fazes me. It looks like I'm not an emotional investor, which is great news.

The move to HK has been put on hold indefinitely, we are still targeting Q3/4 2020 but I'd not be surprised if it gets pushed to January next year.
I'm obviously not happy about this, and financially it's a pretty big missed gain, but it's only money.
Sure I could make/save much more, but I already make/save significantly more than I need and have a very large nest egg.
Many people will suffer a lot financially in the coming months, so I just consider myself super blessed to be where I'm at

Thanks for reading

wolf
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Re: Seppia's journal

Post by wolf »

Seppia wrote:
Mon Mar 16, 2020 11:34 am
As of today, I have lost the equivalent of three years' salary in the last three weeks. I am impressed how little this fazes me. It looks like I'm not an emotional investor, which is great news.
:shock:

Wow, I have "lost" also quite some money, maybe the equivalent of five years' expenses. On a positive note, I found myself (yet) calm and only with minor emotion of regret (buying to early). But you "lost" three years' of salary. That's quite an amount of money. I guess, as you wrote in another post, you have quite some cash available in order to invest further "down the road".

classical_Liberal
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Re: Seppia's journal

Post by classical_Liberal »

Glad the baby is doing so well! In a way it's kind-of cool that you get to spend so much time at home right after a baby, despite the human suffering outside.

If you and DW are getting along with a new baby AND without your standard alone time, it sounds like the relationship is solid. So congrats on that too.

My personal psychology with the NW losses is fascinating. At first it stung, but now, the deeper it gets, the more I'm kind-of hoping it just keeps going. I've always thought I have a relatively low risk tolerance, but experiencing this fast, deep drop really hasn't phased me much. Financial matters are occupying my mind more than normal, but it's kind-of exciting to try to form a strategy to come out of it as best as possible and to see my theory/simulations of such events play out in real time. I've always expected my portfolio to take a hit about half of what the S&P drops, and so far it's right about there.

Stay healthy!

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Seppia
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Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: Seppia's journal

Post by Seppia »

@wolf: I had about 1.5 years of salary stashed in cash, so not bad. I've been buying on the way down so of course it doesn't feel amazing to see another 10-15% taken away from your latest investments.
But what can you do? You can't buy everything at the bottom.
classical_Liberal wrote:
Tue Mar 17, 2020 3:12 am
the deeper it gets, the more I'm kind-of hoping it just keeps going.
Same for me, it has trned so much that now I'm sad when I see green :lol:

@ffj: thanks! Yes I imagine. When they're young, you're a superhero to them. Then you turn into an idiot and finally, kids understand their parents are human beings with strenghts and weknesses that just happen to love them very much.
I've gone through these phases myself :lol:

_bb_
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Re: Seppia's journal

Post by _bb_ »

Amazing journal, thank you for taking the time to share. Congratulations on the latest family addition!

Frugalchicos
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Re: Seppia's journal

Post by Frugalchicos »

Hey, reading through your journal (these days allow a lot of time to do anything)... Congratulations on the little guy!!

Also, I guess we are all on the same boat in regards to "losing" NW. I am somehow taking it calmly and putting more money in as it continues going down.

Stay safe buddy

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Seppia
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Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: Seppia's journal

Post by Seppia »

March Update

Quarantine

Having been working from home for a full month now, some thoughts on the experience:

As with everything, humans adjust.
On the family side, we have our little one keeping us active and happy - an obvious advantage.
I mean, how can you not feel happy when you turn your head and see this: https://ibb.co/gjFHkqm <-- he does this a lot when he's tired, he just flips his legs up and stays still :lol:
Oh by the way: the crib in the picture used to be MY crib 40 years ago. My parents reused it for my two sisters, then it was used for my two nephews and now for my kid. How many ERE points does my family get for that? 8-)

I also have been cooking quite a bit, I made some homemade Bolognese twice and baked this lasagna (all the ingredients including the pasta were homemade)
https://ibb.co/f8BK3Kb

Another lucky break is we live in a complex with closed mini-park, so we get to go out and breathe some fresh air (and walk) twice a day when the weather is good.
Yes, walking 2 hours in circles isn't exactly awesome (which is why I never managed to do more than 18k steps/day on a good day), but considering the situation, we feel lucky to have that.

The same adjustment applied to work as well.
After a learning curve, everybody has gotten better at this and now workdays are back to being fairly effective.
Being in sales, there is no long term substitute for face to face contacts and being in the markets, but I'm impressed how little disruption there's been.
A major upside is I haven't been wearing a shit/tie for a month, it feels great :lol:

Money

In March I saved 70%, no strange expenses other than the fact that I spent 3x a regular month in groceries. Half the overspend was retail therapy (ie bought some relatively fancy bottles of wine), half of it was increasing stocks.

I deployed about 38% of my cash into equities, buying at different steps consistently with my investing plan.
The invested amount is approx 50% of the dry powder I had stashed, as I want to keep at least 15-18 months of living expenses in cash at any time and would not draw that down under any circumstance.
So now I'm currently sitting at 35 months of living expenses in cash, but my 2019 bonus will be paid at the end of this month, which will bring the total at around 50 months of expenses.

Current AA is
86% equities (45% indexes/55% individual stocks. 80% europe/15% emerging/5% USA)
14% cash
plus the paid off mini apartment in my home town.

The company who built the tiny apartment I purchased in my home town closed shop, so they are auctioning the remaining units.
We are now at the third round, the unit next to mine is still unsold, and will be auctioned for a price that is below building+land cost (750€/sqm for a very high quality construction).
So I’m really thinking of taking a chance, as the two units combined could become my definitive ERE HQs. I would be paying cash.
We do not need this extra apartment, but the one we own would only work as a permanent residence in a SHTF situation. It's around 45sqm and we are three: I like small apartments but that's a tad too small to live comfortably.
So I'm thinking: I have the chance to buy this other unit for below cost, and in general for a trivial amount of money.
I could use it for rental income for now, and when we call it quits I can just join the two apartments and go live there comfortably.
Thoughts?

Couple of extra thoughts on money:

1- Even with the drop in equities, my investable assets equal 20 years of expenses. If I quit my job and we moved into our apartment, we could easily slash expenses by 1/3rd. We are basically FI at this point, but I love my job and we want to have an experience living in Asia, so why quit now? We don't see it as a race

2- Looking at my AA, most would say I'm a very aggressive investor, but on the other hand we have zero debts (including mortgage obviously, which for some reason sometimes people do not consider a debt), have a paid off small apartment, and generally hold a lot of cash.
So I can't figure out if I'm aggressive or defensive lol

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Bankai
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Re: Seppia's journal

Post by Bankai »

Looks like you're doing great on all fronts - good job!

Re: second apartment: €34k does indeed seem very very cheap. Some questions I'd ask:

What would be the total cost including finishing it off and turning them into a single apartment?
Assuming both flats are empty, how much impact on cashflow would bills & taxes for both have?
Is there an option and would you like to rent one or both out while you live elsewhere?
How easy/profitable could you sell them if you change your mind?
How would returns compare to just buying more stocks?

If you really want to go back to your home town and live in an apartment and not a house, this looks like a good idea. However, if this is not going to happen for another few years, the opportunity cost of having cash tied in 2 empty flats with negative cash flow would be quite high. If you decide to go ahead, I'd still take a mortgage for the second flat - if you pay with cash, you're close to no buffer and if you lose your job when there's another leg down in the market, you don't want to be selling equities to pay bills. Besides, why not take advantage of super-low interest rates?

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Seppia
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Location: South Florida

Re: Seppia's journal

Post by Seppia »

Thanks Bankai, great observations.
To answer your questions:


What would be the total cost including finishing it off and turning them into a single apartment?
probably 55k all-in, tops. I'm probably overestimating this by 3/5k.

Assuming both flats are empty, how much impact on cashflow would bills & taxes for both have?
About 5% of my monthly wage

Is there an option and would you like to rent one or both out while you live elsewhere?
I would definitely rent one out immediately. Assuming I offer very attractive rent, rent from one of the two should pay for a minimum of 80% of the basic costs of both. The building is new, so I am (maybe optimistically) assuming no major renovation/big work to be done for the next 10 years.
We would keep for us the one we already own, since the purchase was made 50% to have a roof over our head in a SHTF scenario, and 50% to have a place to sleep when going back to see family/friends (DW and I are from the same town).
The French would call it a pied a' terre

How easy/profitable could you sell them if you change your mind?
No idea really, but my thinking is: if I pay 55k for a newly built apartment and have to resell it, how much money could I realistically lose? The downside is fairly low.

How would returns compare to just buying more stocks?
I would not be seeing this in terms of returns. My thought process is more:
I can buy today, below cost, something that I will very likely have a use for in 5/10 years.
I can pay cash, or take out a mortgage I wouldn't even feel.
I can rent it and have a zero cost of ownership.
I would be shifting my AA towards hard assets.

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Bankai
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Re: Seppia's journal

Post by Bankai »

OK, so the upside here appears to be much bigger than the downside. If you take a mortgage, you can even improve your cash flow compared to present as rent is likely to more than cover the tiny mortgage on the flat. More RE is also better against inflation which many expect to raise next year once things stabilize - those trillions need to be paid off somehow. And there's potential long-term upside from RE appreciation and locking in below cost asset. Also, the refurbishment doesn't need to be done until you guys are actually moving in so no immediate additional costs. Sounds good to me! One more thing to check - how is the rental market in your home town and is it expected to change for worse in the current climate?

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