Hi folks! Instead of my usual blog post where I decide the topic my choosing, this week’s post I thought I’d we mix things up a bit! It’s time for the readers to take charge and let them ask questions!
That’s right, it’s Q & A time! This week’s post is composed entirely of reader questions, and I’ll do my best to supply the answers!
Without further ado, lets get this Q & A started….
A: Presumably you mean how am I doing during COVID-19 lockdown? I’m doing great!
Well OK, that’s not entirely true. To be perfectly honest I’m a little exhausted by this never-ending lockdown. I used to have nice breaks during the day when the kids were at school — time when I could work on my own projects, write, study, take a nap, read, or otherwise gather my sanity into a neat little pile.
Those breaks are gone now. I still have all my regular household duties (cooking, cleaning, etc), but now I’m homeschooling the boys. Pretty much all of my “me time” has disappeared. It’s “all-kids all the time” here, which is very draining.
I should also add that homeschooling is NOT easy. No way José! I’ve never had to play the role of “teacher” before, but I’m doing my best. Have you ever tried to teach fractions or how to phonetically sound out words? It’s harder than I would have guessed! It’s also an incredible test of my patience.
You could say I’ve learned a newfound respect for teachers!
A: In the short-term, our spring and summer travel plans have completely gone up in smoke. (Maybe it’s more of a dumpster fire?)
We had a road trip planned this spring that needed to be canceled, and our summer travel plans have been completely canceled as well. Originally we planned a visit to some National Parks in the U.S. Southwest, but with all the COVID-19 lockdowns we are most likely staying home this summer.
It’s not even clear if traveling in the fall will be a viable option. I’ll wait and see how things play out, but I expect 2020 to be a year without much travel.
For longer-term Financial Independence plans, I believe we’re still in a very stable financial position that will allow those plans to keep moving forward. We still have at least 5 years of living expenses in cash, and most of our stocks are still paying dividends.
Our cash flow is healthy (for now at least). Even under some of the most pessimistic economic predictions I’ve seen, we should remain financially independent.
Indeed, this recession will probably strengthen our financial position. We tend to buy assets when they’re affordable. Just like the Great Recession was a rocket booster to our financial independence, the “COVID Recession” might play a similar role of allowing us to buy good assets at a discount.
A: Homeschooling is by far my biggest challenge. Our boys have a lot of energy and it’s hard to burn it when staying at home. I don’t know how the regular teachers manage a classroom of 20+ rambunctious kids. Even with just two children, it’s maddening at times.
I do my best to keep them focused and working, but I get the distinct impression my kids would rather be doing something else.
A: It’s a bit of a mess these days! My time for blog writing is now super limited. After a full day of homeschooling the kids, I only get to sit down and do a little writing when they go to bed. (around 9:00 pm). I’ll keep writing as long as I can keep my eyes open.
(Yes, I’ve fallen asleep at the keyboard more than once!)
Typically my process starts by doing research on my chosen topic mid-week, and then I’ll begin by writing a bulleted point outline on the topic. On Friday night, I start playing “fill in the blanks” for all my bulleted points.
I wish I had more time for writing, but the simple fact of the matter is, I don’t. I don’t want the blog to die out, but it’s hard to find the necessary time for writing under lockdown. In response, I’ve been trying to use more family pictures and avoiding complex topics that would require longer posts. This makes writing a blog post quicker, but I actually miss working on the more technical articles.
I hope the kids will be back in school soon, and then I can start working on the blog again in earnest.
A: Writing this blog has always been a passion project for me. Personal finance, and more specifically investing is where my passion lies. My blog is not about pushing BlueHost signups or Personal Capital affiliate links to make a bunch of money.
I hardly make any money from blogging. My motivation really comes from what I’m interested in learning about, or teaching to someone else at that point in time. Usually this is about something investing related, like Preferred shares, the Dunning Kruger effect, or the failure of a great many investing strategies.
For my recipe posts, those actually have a huge amount of personal utility. I actually use my recipes that are posted here! I’ll pull up my own blog on a laptop in the kitchen, and then start cooking from there!
A: Sure, I have a few thoughts on this! You should think of your emergency fund (and portfolio) as a fortress. It has strengths and plenty of weaknesses. A good commander will work diligently to reduce those weaknesses to the point where the fortress can withstand any attack.
Start reducing those weaknesses by paying off all your debts if you can. This will greatly reduce your stress levels during difficult times, and further reduce the amount needed in a emergency fund.
For example, I still hold a mortgage of $270,000. To keep our lifestyle a stable fortress of independence, I maintain enough cash that I could easily pay-off all my liabilities (including the mortgage) at any time.
This feels very secure to me, and I sleep well at night knowing that I have the option to pay off all my debts if necessary. I could also use that money to make investments, as I did recently.
Incidentally our emergency fund has about 5 years worth of living expenses, which is an amount I feel comfortable will outlast most recessions. A lot can happen in 5 years, and if our financial situation was to deteriorate to the point where the Tako family was no longer financially independent, I feel pretty confident I could find a job in 5 years.
A: Mrs. Tako and I both attended 4 year public Universities and received Bachelor of Science degrees. I paid for my bachelor’s degree with a mix of savings from summer jobs, and (mostly) student loans. I had around $50,000 in student loans when I graduated. Mrs. Tako used a mix of savings from part-time jobs, and assistance from her parents to pay for school.
For some reason, a few years after joining the workforce I thought it would be a good idea to go back to school and get my Masters in Business Administration, which I did. I went to a fancy private college for this. The cost was roughly $40,000 for that degree, and I paid out of pocket with cash.
As far as our kids go, they both have 529 college savings plans (which are invested in a S&P 500 index fund). They’re still pretty young, but it might turn out that a 4-year college might not be the best choice for one (or both) of them. We’ll see how it goes, but for now I’m assuming they’ll attend a 4 year public University.
Our current plan is to pay for college with a mix of 529 accounts, their part-time job savings, and (at least initially) student loans. If they managed to attain a degree and prove themselves to be good students, my (secret) plan is to pay off some of that debt when they graduate. Sort of a “graduation gift” if you will for a good student who stays out of trouble.
I’ve seen far too many kids partying through 4 years of their parent’s cash to know that it’s a bad idea to just hand kids a free ride for 4 years. Many kids given “handouts” don’t take their studies seriously enough, and fritter away time and money on useless degrees and drunken partying.
A: Unfortunately our elementary school system doesn’t have a language program, so right now our kid’s primary exposure to Japanese is at home. We try to speak Japanese with them as often as possible, but it’s limited.
Unfortunately, it’s hard to teach kids a foreign language as complex as Japanese from just a few hours at home. Before COVID-19 we were going to look into a foreign language Saturday school (once Tako Jr. #2 completed his language immersive daycare), but COVID-19 has effectively canceled these study programs.
We’ll see if the Saturday schools start up again in the fall.
That’s it for this week’s Lockdown Q&A! I hope you enjoyed reading this new style of post. If readers enjoy it, I might decide to do this again! Leave a note in the comments if you think I should do another Q&A post!
Stay safe everybody!