What I learned at our second annual ‘Personal Finance Day’

Following up on last year’s inaugural, two friends and I returned to the rural county we grew up in together and had a day-long nerd out on personal finances.

Yes, after cocktails and dinner and catching up, we literally gave presentations and shared tips on things we were learning about navigating the very complicated personal finance world. It’s all about fun and self-improvement.

We shared and discussed and debated over ideas and rules of thumb and data — like the above pictured Zillow chart predicting longterm real estate growth in my neighborhood of Fishtown.

Below, I share a few notes that aren’t top secret.

This is a list of risks for operating a rental property, including having an illiquid asset.
This is a list of risks for operating a rental property, including having an illiquid asset.
  • Rental property ownership — The allure is in dense residential districts causing growth in rents, particularly where you can buy a house that allows that rent to more than cover the mortgage. The importance is the leveraged debt: With a 20 percent down payment, (and a dependable tenant) you can slowly accrue a much larger asset. You should treat rental properties like a small business, with relatively low short term margins and the bet on greater returns later.
  • Sharing economy — One friend was interested in Uber driving in off-hours, and I shared on our success with Airbnb.
  • Time banking! Friends might barter by sharing skills or exchanging hours. We talked about several kinds of alternative currencies and this concept was one of the simplest. We also talked about ideas like bitcoin.
  • Understand where you are in the country’s wealth. Try income calculators for understanding the context of your income by U.S. standards like this one from CNN or Pew’s.
  • Mint.com has interesting possibilities for creating data and overseeing various inputs. We played with this, updating my existing, unused account as a friend had some new enthusiasm for it.
  • Public sector retirement strategies are different. With two government employees, we discussed this and contrasted a bunch.
  • We’re not expecting a stock market slow down. We all plan to put more in equities, with confidence that lots of ‘recession-resistant’ industries like healthcare are part of a strong stock market.
  • Look at the financial literacy of drug enterprises. One friend gave a super interesting review of what he was finding in the enterprises of the drug trade he was following for work. (One example spent most of his profit on his habit).
  • Financing even a state campaign is complicated. We got an insider’s look at this from a friend who ran for public office.
  • What is your city’s break even rate for renting? This is a cool way to think about homeownership, via Zillow.
This is a chart showing how different cities have a 'breakeven' time horizon at different thresholds when it makes sense to buy rather than rent.
This is a chart showing how different cities have a ‘break even’ time horizon at different thresholds when it makes sense to buy rather than rent.

[Private Slides]