Death of a dividend investing blog site

I was about to recommend someone checkout the glorious Dividend Mantra blog site, only to discover “something” had happened.

Reading a detailed blog article, I was shocked and amazed that the man who used to publish his ACTUAL DOLLARS and stock picks had seemingly sold out and the “new owners” are killing it faster than Socrates could down a glass of hemlock.

I agree with the author, that if offered a lump sum of perhaps $50K and a long term goal of financial independency by the age of forty, I might just as well. Sad, but apparently the case.

Dividend Mantra illustrated on a month-by-month basis that picking strong, stead, dividend yielding stocks CAN produce a consistent growth in monthly income. Large trading houses with billions of dollars spread across funds are “seeking alpha”, i.e. buy low/sell high gains, and we can never match them. Given they fail ANYWAY, there is no value pursuing them. But pursuing consistent, steady income DOES work.

If you’re looking for someone that has NOT sold out, check out http://www.dividendgrowthinvestor.com/. That is a nice site that also has good tips and tricks when it comes to dividend investing.

So here’s a big salute to someone that might have attained his financial goals!

101 Investing Tips

habit-saving-moneyA few weeks ago, during spring break, I was offered a fee to write up a list of investment tips. I thought about it for a bit and ended up writing five. Today, the article is published at Dividend Reference. Go there and find mine at #55. I’ve skimmed the list (planning to read the whole thing when there is more time), and so far, it looks great.

I want to let this one sizzle a little before I publish a follow-up article with the other tips I submitted, but didn’t make the cut. (There were LOTS of submissions!)

Happy reading!

Building wealth isn’t free

habit-saving-moneyAll too common, I see people obsessing about fees at the wrong phases of building wealth. There are countless websites and forums where people discuss low cost index funds. The problem is, they haven’t calculated the Big fee that will hit them at retirement: taxes.

Standard IRAs and 401(K)s are designed to get you to sock away money tax free today, only to turn around and pay income level taxes at retirement. And to top it off, Uncle Sam demonstrates his hunger for that tax revenue by forcing you to start cannibalizing your savings at the age of 70 1/2. If you save up a big pile of money in something that pays a handy dividend, you can’t keep it forever. You will be forced to start taking minimum withdrawals.

To illustrate, I tracked down an online early withdrawal calculator. I plugged in $1,000,000 balance, and it told me that the age of 70 1/2, the minimum withdrawal amount was just shy of $36,500. To frame this in lingo that financial consultants use, we are all told to withdraw no more than 4% per year in retirement. 4% of that balance would be $40,000.

A subtle but little discussed point in all this is the “no more than” piece of that advice. The idea is that our retirement fund is expected to grow by more than 4%. Hence, ONLY withdrawing 4% should let our principle grow. But if we only have a 3% growth, we should ONLY withdraw 3% and hence NOT tap into the principle.

If we have a losing year, we shouldn’t draw anything at all. The hope is that our retirement funds would throw off dividends to fund ourselves. Anything else, and we are cutting into the principle and forever reducing future earnings and available cash. But these minimum withdrawals don’t grant us the ability to scale back to 3% or even skip a year of withdrawals. Instead, we are forced to cut into that principle so the government can get their piece of revenue.

It’s okay to pay taxes

TaxesIf there is any kind of lesson, it’s that taxes must be paid. The only question is when. People obsess over paying taxes today. They would rather push them off and score all the tax deductions possible. But that might not be the most efficient strategy nor the most stable one for your retirement.

The truth is, it’s better to pay the taxes now. That way, in retirement, there is no need to ship off a chunk of your retirement wealth to the government at who knows what tax rate. And if you use Roth IRAs instead of standard ones, there are no required minimum withdrawals! If there is any hint of what the IRS prefers, just checkout the fact that people making over $191,000/year can NOT contribute to a Roth IRA.

There is an old adage: would you rather pay taxes on a bag of seed or on the harvested crop? In true mathematics, if the rate at both times is identical, then you would pay the same taxes on either side. But that is rarely the case. And who knows what the tax rates will be 30 years from now?

Don’t forget about management fees

panic_buttonI’ve talked about fees many times. One really surprising article was about a couple that held dozens of mutual funds and never consolidated. They actually had a big chunk of cash. The effect was disastrous!

The couple in that linked article were paying a financial advisor 2.5% annually. Sounds small, except that they had saved up $1.3 million. Annual fees exceeded $32,000! Imagine paying $32,000 each and every year of your retirement.

The actual plan they were pursuing was to consolidates into half a dozen funds, and reduce annual costs to 1%. That is terrible! Cutting down to $13,000 in annual fees is terrible. The irony is that if they looked at the top ten stocks in each fund, they might find a lot of well recognized companies: Coca-Cola, Walmart, Apple, General Mills, Pepsi, Dr. Pepper-Snapple Group.

If they simply sold everything and bought $130,000 of each of the top 10 stocks, their annual fees would drop to nothing. There would be a one time cost of selling the funds and buying the positions, but after that, no management fees. And then they could drop the financial advisor! To top things off, they would probably rack up better dividends, dividend growth (like getting a raise in retirement), and also see asset appreciation.

Stocks aren’t the only way

Mortgage_Loan_Approved1Other options would include discounted notes. I’m in the middle of migrating my Roth IRA into a Self Direction Roth IRA. The plan is to buy warrantied, discounted notes. The noted fund I have joined sells 1st position notes at a discount. That means mortgages that were perhaps written for 5% would yield me something much higher, like 9-12%. They are also warrantied meaning that if the payee stops paying, I have the option to either foreclose and sell the property, or I can collect on the warranty and get back what I put in. Show me a stock or mutual fund that offers that.

As an example of discounted 1st position notes, imagine a note where the payee owes $100,000. Imagine it was written with a 5% interest rate. Monthly payments would be $536. The person holding the notes decides to sell it for whatever reason. Maybe they needed a quick source of capital. To move the note quickly, they are willing to accept $65,000. For $65,000, I can get that monthly stream of $536. Punch that into your calculator, and you’ll see that we are getting 9.9% yield on that investment.

To top it off, whenever the payee decides to pay it all off, I collect an extra $35,000 (remember, original balance owed was $100,000). If that happened five years out, the annualized ROI would be about 9%. Pretty good return on the money. And then I can take all this cash and buy more notes, boosting my monthly yield.

Thanks to having this inside a Self Directed Roth, there are no taxes involved. I have to pay a service fee to my note payment collectors of about $15/month. And the Self Directed Roth custodian needs a minimal fee as well. But nothing close $13,000 year! That is horrendous.

EIULs are designed to reduce costs in the future

EIULeffectThe last leg in my talk about good vs. bad management fees are EIULs. I frequently hear life insurance products criticized as being ridiculously expensive. The truth is they ARE very expensive….for the first ten years. After that, the costs drop dramatically.

Insurance companies design these products so that they collect their profits up front. That way, if you fall through on future payments, they don’t care so much. It also makes the products better guaranteed to last properly. A key ingredient, though, is to overfund as much as possible. By overfunding a policy, the cash value grows much faster. And the faster the cash value grows, the less total insurance must be bought. It’s a vicious cycle. If you slow down the growth of cash value, more of your premiums is used to fund the difference, i.e. the corridor between face value and cash value.

But when you overfund the policy, the total amount of insurance purchases through the life of the policy is greatly reduced and in the end, the annualized costs drop to somewhere like 0.5-1.5%. That’s pretty handy for getting a big chunk of cash in retirement that is completely tax free according to IRS tax code.

It’s not simple or easy to build wealth all by yourself. But delegating ALL decisions to a financial planner can be very costly when you reach retirement. The key is understanding the fundamentals of building wealth so you can hire the right experts to set up things most efficiently.

Financial Math III: Diagramming Cash Flows

This post will wrap up my series on Financial Math. I’ve previously written about:

In this article, I want to go over a fundamental mechanism any investor should at least be aware of: Cash Flow Diagrams. If you look to the right, you’ll see a common example.

The first line, that goes upwards, represents a burst of positive money you receive. The following payments, or negative cash flows, are essentially used to payback the initial cash flow. Do you recognize what common financial structure it is where you get a big chunk of cash up front, and then make small payments over a certain time period? That’s right, a loan.

For another cash flow, check out this one. It is the opposite. It shows a big chunk of cash being put out, followed by several small cash flows coming back. Can you think of any examples that match this? Buying a rental property and receiving monthly rent checks. Buying a big chunk of stock and then receiving dividend payouts.

At the heart of any financial transaction, investment, or purchase, you can probably see one of these two diagrams. When you are trying to make a choice on whether to buy a big chunk of stock OR put the money into a rental property, its useful to sit down and chart all the cash flows. Then, you can compare the two. The ratio between the the periodic payments and the invested cash is known as the cap rate, and it’s important to understand the cap rate for each usage of your money. When one opportunity yields less than the other, we refer to it as opportunity cost.

When you are about to pick a certain investment vehicle, it’s good to also make a list of the risks involved. Real estate has certain risks. Stocks have another. And paying off your mortgage early may carry fewer risks, but also consider the loss of opportunity if you don’t build up any positive cash flows in the future. Are you painting yourself into a corner of being house rich/cash poor?

Ever see those commercials where you can “get your cash now?” They are all about taking over your tiny positive cash flows, and swapping them with a big one right now. Believe me, those people make money. They simply calculate your cap rate, plug in a profit factor on top, and essentially calculate a smaller amount of cash to hand you than if you had kept the cash flows for yourself.

Hopefully, this series will have alerted you to the benefit in understanding some financial basics. Happy investing!

It’s the yield, stupid!

habit-saving-moneyWhen it comes to building retirement wealth, you must keep your eye on the ball. What does that mean? Simply put, your goal is having the biggest after-tax cash flow when you reach retirement. Cash flow now, 25 years before potential retirement, is foolish. If you take a step that results in MORE cash flow today but produces LESS cash flow in retirement, then it was the wrong step.

Something to look at is the yield you currently receive. In essence, at any given time, you have a pile of cash. Your pile of cash should be earning some degree of cash. The rate it earns is the YIELD. If you have $100,000 and it nets you $5000 a year, you have a yield of 5%. We can discuss lots of different assets and their various yields. Real estate, CDs, mutual funds, bonds, stocks, whatever. Bottom line: your cash needs to be put to work. And the higher yield the better.

Duh! That part is obvious. What is more subtle is that you need to always look at all money coming in as cash flows. You may have a daytime job, which is one cash flow. But you may also have real estate properties generating cash. Your stocks may generate dividends and distributions. But at the end of the day, you need to know what your total yield. And then you need to be willing to investigate options that can increase your yield.

At that point, it becomes easy to evaluate whether or not debt will help or hinder your growth of wealth. When real estate can generate 5% growth and you leverage it 4-to-1, you dial things up to 25%. Borrowing money at 4.5% becomes a no brainer. The remaining hurdle is hedging the inherent risk that higher yields produce. One of the biggest ways to immunize yourself from real estate risk includes:

  • Having a big bag of cash sitting at the bank. How much? Think about 100% vacancy for a year.
  • Buying top quality property. This draws top quality tenants. It costs more but reduces the risk of renting to non-payers that must be evicted.
  • Renting in a landlord-friendly state. Hot tip: I don’t own rentals in California, and won’t in the foreseeable future.
  • Become a macroeconomic investor. Invest where the big indicators show a good rent-to-cost ratio (like Texas).

And never, ever, ever pass up opportunities to sell one asset if you find another that shows a consistent, sustainably higher yield. Because the higher the yield, the fast you can put that cash flow towards buying MORE quality assets to generate cash.

Good luck.

So you want to build wealth? Look for multiplicative ways, not additive ones

“Another day, another dollar” — common expression

This expression is commonly known by many. It represents a common, core feeling we get as members of the vast work force. We go to work, put in the hours, get paid our wages, and go home for the day. This is not the way to build retirement wealth.

When it comes to building wealth, getting paid on a day-to-day basis is additive. To accumulate enough wealth to last for years, we have to put away huge amounts of money. Typically 30% of our take home pay is a minimum amount.

Why do I say that? Because the tools we are being sold on for investments don’t work unless we compensate by over-saving. A good example is the classic skip-that-daily-latte and instead save the money, and it 20-30 years, you will be a millionaire. I had heard that a few times, and figured it sounded great. Until I read an objective analysis of that. Basically take $5/day and multiply it by 365 days. What do you get? $1825/year. Doesn’t sound too bad. Today. But let’s take this concept and back up to 40 years ago. What was the median income for people back then? According to one source, median household income in 1974 was $9780/year. That would imply that saving $5/day, the price of a cup of coffee, was like putting away over 18% of gross salary. If you can assume 28% in withheld taxes, the percentage saved against take home pay would be 25.7%.

Wow! If we are to read that correctly, it suggests that saving $5/day today may result in $1MM, but in 40 years (if you started this when you were 25), $1MM probably won’t be worth much at all. Instead, we should read that correctly as needing to save AT LEAST 26% immediately.

Many people, if they looked at that, would just throw their hands up in the air and give up. But if you’re here, you surely have guessed that I’m going to say something different.

We need to look for options that have a multiplicative effect. What is that? It’s when you make some making by direct action, but the more actions you take, the more they interact with other actions already in progress.

One thing that I realized as I wrapped up the last chapter of my 3rd book, is that doing something as small as writing books on the side can introduce multiplicative money making. Today I finally got some time to watch a TV series with Neil deGrasse Tyson. I’m quite fascinated by astrophysics and his series seems entertaining. In the opening credits, it notes that Dr. Tyson has written ten books. Something I can realize is that the more books you write, the more books you will sell. Not additively, but multiplicatively. Simply put, people that enjoy one of your books are VERY likely to go and buy your others. My first book has yet to earn enough to pay off the advance I received. The second accomplished that about two years ago. My dream is that my 3rd will accomplish that even sooner, possibly through more social media, more people that read my previous works, and that some will even go back and buy my previous writings.

It’s only natural. I read the first Jack Reacher book, got hooked, and have now read ten so far. I read “Schrödinger’s Kittens and the Search For Reality”, and have since ordered the predecessor. When you go out and invest yourself into more and more and more opportunities that can yield more and more wealth, the opportunities grow.

So I highly suggest that you take some time to sit down and think. Simply think. Look at what you are doing today. What you have done for the past week. And think about what else you could be doing that can generate secondary effects. What if you started a blog and wrote on a daily basis? It could be small stuff. But it might grow your public image. It might open doors you didn’t expect. Open your mind to looking for new opportunities such an endeavor could raise.

These are all important the rather narrow vision the corporate 401K plans have. The general idea of a 401K is to sock away money in a fund that doesn’t grow very fast. And when you hit retirement, you are required to cannibalize it. Why do I suggest this? Because the federal government has a schedule after which you are obligated to start taking withdrawals. If you’re retired and doing just fine, it doesn’t matter. The government set things up such that they can collect taxes on your withdrawals and they will NOT be blocked from you doing just that.

In case you didn’t know this, the rich NEVER cannibalize their assets. There is this mantra out there that rich people adhere to: NEVER TOUCH THE PRINCIPAL.

In essence you are on a mission to accumulate wealth producing assets that themselves generate wealth you can live off of. You can’t wait until you are retired to begin writing books, building a blogger reputation, or something else. Instead, that is what must embrace while you still can earn enough of a daily paycheck to keep afloat. This is your opportunity to start buying real estate, dividend yielding stocks, EIULs, and discounted notes. Simply putting away 50% of your take home pay and planning to live like a pauper doesn’t sell very well. Good luck!

VNR pays $0.2075 distribution

Like clockwork, VNR has paid out it’s $0.2075/share distribution late on Friday. Considering this is my biggest stock holding, I get a nice warm fuzzy every month this arrives. I’ve already scheduled the entire distribution to be sent as payment on my HELOC.

I also enjoy that my children’s custodial accounts have picked up some more shares of VNR thanks to reinvested dividends. I’m building wealth for myself, and for my children as well.

As a side note, I may have to revisit my spreadsheet used to track cost basis. For my other stocks, it’s no big deal. You only need to track the purchase price of each lot you own. But with VNR and it’s MLP nature, every dividend payment causes a reduction in cost basis for each lot. This means I have to track about five bits of information each month. It can get complex, but this is something I can’t depend on my broker maintaining

The secret value of dividend yields: reduced risk of capital loss

One thing I try to bring into focus in my various writings is not only the value of various investment tools, but also their risk. There seems to a big movement afloat to find the tool with the least amount of risk. Everyone wants to dodge risk and avoid it all costs.

The problem is, you can’t. The only way to grow adequate retirement wealth is to take on risk and then mitigate it. What does that mean? It means that you recognize risks are out there and you actually have options in place if and when the risks become true. Because eventually, some risk factor will kick in.

When it comes to investing in stocks, I’ve mentioned many times how I have picked some strong dividend payers and am accumulating their dividends to either buy more shares or pay off my debt of funding. Do you know what happens anytime I mention this plan for investing in stocks to other people? I get shocked reactions.

“Your buying stocks? Isn’t that risky?”

“What if there’s another melt down?”

“Wouldn’t it be safer to buy a mutual fund or an index fund?”

These are typical reactions from people that have been coached since Day 1 by their employer’s 401K representative, by money-based magazines, by many financial radio shows, and by gobs of articles. The only place you should be putting such important money is into safe, risk free vehicles like 401K funds.

Risk free 401K funds – they don’t exist

When one of your friends tells you to pick risk free mutual fund, tell them there are none. The stock market corrections of 2000 and 2008 knocked the entire mutual fund industry on its side and caused a huge number of people to jump ship. Not everyone did, but in order to satisfy those that bailed out, a lot of funds had to sell holdings when they were down and lock in a loss for everyone involved. To make matters worse, many funds had to maintain their status, so they actually increased fees on those that stayed in!

Looking at my stock position in VNR, I can see how much the total value has grown since I bought it. It’s actually up, but only a few percentage points. But over the past few months, I have been raking in 8.5% yields on a monthly basis. Essentially, if I added up all those dividends and subtracted them from my cost basis, THAT’s how much the stock would have to dip to REALLY impact me.

Every month that I receive another dividend check from VNR is another month that my position gets more solid. This growing value of my stock position isn’t reflected in either the price of the stock or its cost basis. When looking at historical charts for the stocks performance, there is nothing that tilts the graph based on dividend yield, and hence, many people don’t see the time value of holding stocks directly instead of mutual funds.

Another place I can see this magic of secret value growth is my children’s custodial accounts. I opened an account for each and put a certain amount of money in each. I bought shares in two different stocks and set the accounts to auto-reinvest (DRIP) with each dividend. In this situation, the entire price of the stock plus all dividends will gather together over time. While the value of the stocks may slowly appreciate in value, the compound power of buying more shares will also kick in. I can already see that despite both stocks actually being negative from when I first bought them, the total value of the account is higher than the initial seed money I put in. With that, I can see that the money is truly growing, and nobody is taking out any annual fees on the order of 2-4%. (Of course, I’ll need to run this by my accountant so proper taxes are paid.)

Apple posts $3.05 dividend

Last Thursday, after the close of the market, Apple (AAPL) posted a $3.05/share dividend. I have Apple stock in both my normal brokerage account as well as my Roth IRA.

I currently have the checkbox switched on such that those dividends get reinvested automatically to buy more shares. That way I can grow my holdings automatically for no brokerage fees. If I was pulling in a significant chunk from Apple, I would rethink this strategy. But right now, it’s not such a fell swoop.

Apple has a strong balance sheet. What does this mean? Their market cap value (total number of shares * share price) is $472 billion, making it the biggest company in the world, EVER, with Exxon Mobile (XOM) a close second. (For those of you that are curious, Google and Microsoft trail in 3rd and 4th position). But the amount of cash it has sitting in the bank is around $150 billion, i.e. 1/3 of it’s market cap.

Now this money isn’t pure cash akin to a money pit with Scrooge McDuck swimming through it. Instead, they hold various securities, long and short term. But the point is, they have lots of incoming revenue AND dividends from their securities. And these securities can be converted into liquid cash in a heartbeat. If they want to buy a company, they can cash out, offer shares, or make any other creative arrangement. The point is, they are poised to grab any top technology that can meet their interests.

This is one of the fundamental reasons people say even today, at $525/share, Apple is still undervalued. If you drill into technical stats some more, you will find a P/E ratio of 13.21 that says it’s not too expensive, nor is it particularly cheap (like BP).

But let’s not get hung up on the technical aspects of the stock. I fear too many people only look at these metrics to make decisions. They are simply readings of what’s going on underneath. You need to understand a business before you buy it. Something of value to understand, and what many people miss, is the right stats. Android devices have easily surpassed Apple in market share, but that is irrelevant. When it comes to building wealth, the key factor is money, not market share. And Apple holds a big piece of the profits of smartphones and tablet devices. Simply put, Apple keeps on counting the cash from its increasing sales of devices, cash flow from its iTunes store, and cash flow from its short & long term assets it is using to “hold” its cash.

Before you go out and buy Apple stock, be sure you understand how this company works and how they fare compared to Google, Samsung, and the Android market. You don’t want to get shocked by some media report that suggests “Apple is dying” and sell your stock in a panic, when they are solid for the time being.

Annual Wealth Building Review

It’s been a year since I started tracking my net worth. This started after I had made the big withdrawal on my 401K but before I purchased any real estate. It has been an exciting and tumultuous year! All I can say is that I wish I had started tracking my progress years ago. I might have realized sooner that things weren’t working. But there’s no value in lamenting the past.

I’ll start with total growth and then break things down to my various assets. In the past year, I’ve seen 85.48% total growth of my net worth.  That is pretty good considering I paid a 37% effective tax rate this year due to the penalties of making an early withdrawal on my 401K. With that tax burden out of the way, I’m hoping next year delivers a strong performance.

Real estate

My real estate holdings have grown by 20% since first purchase. Now take that with a grain of salt; the values are based on Zillow. I won’t really know the value until I sell a unit. But at least it gives me some sense of their value.

My Florida town home has increased from it’s purchase price by about 12%. This isn’t of much value, because I don’t plan to sell it. But instead, it gives me reassurance that I bought it at a good price. All the other short sales that were going on in the same subdivision are gone, and they have even built a new building in this yet uncompleted neighborhood. These are all signs of the real estate recovery in Florida. It definitely shores up future opportunities in case I need to open a HELOC against it to access any cash.

Mortgage debt on my rental properties has dropped by $7200. That’s only a 1.7% reduction in rental debt, but I just started paying off the smallest mortgage by an extra $1000 this month. So, you’ll have to read next year’s annual report to see how well this feeds my wealth building plan.

I could pencil in the value of my new home I purchased back in March and look at its appreciation, but there is no value in that. Nor is there any benefit in looking at the growth of my previous residence either. Instead, what’s more important is how I used this unplanned opportunity to open a new position in wealth building. Which leads us to…

Stocks

My biggest stock position is Vanguard Natural Resources. But you can’t measure it’s performance by growth in value. That’s because the monthly dividends are being used to pay off my HELOC. The price of the stock doesn’t show a big growth history like Berkshire Hathaway. To best way to illustrate its growth is to take its value and subtract the HELOC balance.  That would show where all the spare dividend cash has been going.

I started with a little over $1000 of VNR a year ago. I have increased that position several times. But back in March, I plunged in by putting the left over cash from the sale of my previous home (made possible by the HELOC used for financing) into more VNR. So far, I have reduce my HELOC balance by -0.82%. It doesn’t sound like much, but I have only been using this cash flow machine for a few months. Next year, the fruits of that should begin to show much better.

My position in Berkshire Hathaway has grown by a modest 6%. My position in Apple has grown by 21%. That is partially because I bought more Apple when it dipped below $400/share. I still believe Apple will continue to grow and innovate, and with the amount of cash they have, it feels like a safe investment to me.

EIUL

My EIUL has done exactly what is was supposed to do. My contributions were increased back in May by 4% to represent cost of living increases. It is slightly ahead due to some small credits being paid. It’s actual value compared to the amount of contributions represents a 5.1% growth factor. This isn’t bad considering I’m paying big values. But the most important thing it is doing right now is locking in its growth. The value of it will not go negative, and when the next market correction appears, it will keep chugging along even as my stock portfolio takes a hit.

401K and Roth IRA

I still have my 401K with my current employer. It’s value has grown by 31%. My Roth IRA, which are refocused on holding stocks and reinvesting by DRIP, has grown by 22%.

If I assume that the real estate holdings are unrealistic, it might suggest that the rest of investment plan is actually doing worse than these plans. But these plans are currently riding the tide of QE from the Fed and other factors. When the next correction hits, they will probably get a hard knock. My Roth IRA might be okay, because I have refocused it on stocks and not mutual funds. But considering I can’t put any more money in it, it’s fine where it is.

Next year

Next year’s report should be more exciting because I have upped the pay off of one rental mortgage by $1000/month. That combined with 100% occupancy is also helping me to increase my rental cash reserves by $1000/month as well. When things get replenished, I can direct that money towards a rental mortgage and knock it out even faster.
Do I expect the same amount of growth? Hardly. 85% growth in one year is actually way above the mean. You should never depend on it or think you can keep it up. A big piece of this is Zillow telling me my rentals are probably worth more than I could actually get for them. In the next five years, when I finally sell one, I’ll get a proper correction to my net worth.

But there is one thing I’m sure of: everything is doing much better now that I have taken an active role in wealth management.