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How Millionaires Will Spend Their Coronavirus Stimulus Checks

Posted by Financial Samurai 130 Comments

If you want another reason why having a high net worth is better than having a high income, all you’ve got to do is look at who gets stimulus checks from the new CARES Act.

If your latest tax return shows an adjusted gross income of under $75,000 for single filers or $150,000 for joint filers, you get a $1,200 or $2,400 stimulus check. With each child, you get an additional $500. Once you make over $98,000 as an individual without children, and $198,000 as a couple without children, you no longer get any benefits.

To make between $75,000 – $150,000 a year in investment income at a 4% rate of return requires having a portfolio of $1,875,000 – $3,750,000. At a 3% rate of return or withdrawal rate requires having a portfolio of $2,500,000 – $5,000,000. Therefore, plenty of millionaires who are retired or semi-retired will be eligible for stimulus checks.

Yes, many of these people are the same millionaires who are also getting healthcare subsidies under the Affordable Care Act. Even though the ACA is supposed to help make healthcare affordable to the middle class and poorest of Americans, I guess you can’t blame these millionaires for legitimately taking advantage of the system.

Based on all these benefits offered by the government, if you want to be a millionaire who lives the best lifestyle while also getting continuous maximum government benefits, then strive to have a net worth between $2,000,000 – $5,000,000.

Out of curiosity, I asked several millionaire stimulus check receivers about what they plan to do once the free money arrives. Here are their profiles and what they had to say.



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Maximum Unemployment For Maximum Stock Market Returns

Posted by Financial Samurai 40 Comments

Are you a little befuddled that with every record-breaking unemployment claim, the S&P 500 surges higher? After 6.6 million jobless claims on April 9, 2020, the total number of jobless claims in 2020 stands at roughly 17 million or 10% of the working population.

With a once working American population of ~158 million, I’m now wondering how many Americans will have to file for unemployment before stocks stop rallying.

Is the inflection point at 30 million unemployed? 50 million unemployed? Or how about 100 million unemployed?

Record-high unemployment claims

Nobody knows for sure, but what we do know is that stocks rally after dismal unemployment figures because investors expect the Fed and the Government will provide even more monetary and fiscal stimulus. The worse the numbers, up to a certain point, the more monetary and fiscal stimulus.

Given I’ve got plenty of extra time to think and write during the lockdown, I thought it might be interesting to see what life would be like under maximum unemployment of 70%. 30% of the American working population still needs to work in order to run the government, provide food, shelter, clothing, energy, and technology. So let’s just agree that 70% or 110 million people is the maximum unemployment level.

Given we already have 17 million registered for unemployment, at a rate of 6 million unemployment claims a week on average, we will get to 110 million unemployed in 16 weeks, or by July 30, 2020.

Similar to Governor Gavin Newsom’s bold proclamation on March 18, 2020, that 25.5 million Californians will get coronavirus by May 14, 2020, I will make the assumption that by July 30, 2020, 110 million Americans will find themselves unemployed if lockdowns extend until then. This is a possibility since the decision of how long we should shutdown is being made entirely by extremely wealthy people who are getting paid either way.

For those wondering, as of April 9, roughly 19,131 Californians or 0.07% of the Governor’s estimate have gotten the coronavirus. So with only 25.49 million more people to go, I guess presidential hopeful Gavin still could be right just like how I still have a shot at making the NBA.



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Staying Unemployed: Why I’m Giving Up On Going Back To Work

Posted by Financial Samurai 54 Comments

At the beginning of 2020, I was excited to start applying for jobs after my six-month paternity leave was over in June. After eight years of unemployment, I had done everything I wanted to do. Now with two kids, rising living expenses, and the possibility of a downturn, finding work would be the responsible thing to do.

My focus was on being a full-time dad to my daughter during her first six months after birth. Constant sleep deprivation is no fun. After six months, I planned to look for work in the tech, media, or finance space in the SF Bay Area.

Although I had anticipated a downturn, I thought I would have more time to prepare. Further, I did not foresee us purposefully shutting down our economy to combat an invisible common enemy.

The coronavirus has already negatively impacted our family so much. I was looking forward to working in an office for 12 hours a day and participating in happy hours with colleagues again. Alas, my dreams have been put on indefinite hold.



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The Work From Home Survival Guide: Because Your Sanity Is Important

Posted by Financial Samurai 27 Comments

Now that millions more people are working from home due to the coronavirus, I thought I’d share some tips on how to keep your sanity.

I haven’t worked in an office full-time since 2012. Losing the routine and the camaraderie of co-workers was tough during the first year. I often found myself twiddling my thumbs, waiting for my wife to wake up because I had been conditioned since 1999 to wake up by 5:30 am.

There was probably a point where I lost my mind for a couple weeks being so isolated from the outside world. So I decided to write about some of those feelings throughout several posts. Here’s one of them: The Negatives Of Early Retirement Nobody Likes To Talk About.

Over time, I got used to the isolation as I found my own routine.

Although I don’t have a day job, I do spend roughly two hours a day on average writing posts and a newsletter.

With the world firmly moving toward remote work, employees everywhere will soon realize several things:

  • How absolutely ridiculous all those meetings were
  • How easily a meeting can be replaced with an e-mail
  • How incredibly inefficient it is to commute in rush hour traffic twice a day
  • How much time is wasted during work hours
  • How it’s no longer as necessary to live in an expensive city
  • How difficult it is to concentrate at home when you have kids and a stay at home spouse
  • How much deadweight personnel there is
  • How lonely working from home truly is
  • How much more productive you’ll be at home

For many, working from home sounds like a dream come true. But like with most things, the grass is always greener on the other side. This post will help you better appreciate your ability to work from home and highlight tips on how to maximize your work from home opportunity.



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Proof Getting Ahead Is About Production, Not Skill

Posted by Financial Samurai 28 Comments

Proof Getting Ahead Is About Production, Not Skill

Back in 2017, a tall Ukrainian fella by the name of Alex came to visit my open house for rent. My five, 20-something-year old tenants had just turned over, thank god, and I was praying to find a stable family to rent to.

Alex immediately said he needed more space for his kids, hence why he was looking. I was hopeful!

We got to talking about the tech world in San Francisco and he mentioned he had started a company called Grammarly in 2009 with a couple of friends. Given I was a writer, I was immediately intrigued by his startup that has now raised $90 million and is worth ~$1 billion.

Unfortunately, writing did not create a strong enough connection between us. He decided to pass. I think he needed a larger house with a bigger backyard.



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A Son Who Doesn’t Love Me, But A Daughter Who Hopefully Will

Posted by Financial Samurai 81 Comments

A Son Who Doesn't Love Me, But A Daughter Who Hopefully Will

I don’t think there’s enough support for fathers and stay at home dads. Men also don’t share their issues and feelings as readily as women for some reason. As a result, I’d like to change this by sharing more fatherhood stories and raising awareness about what many fathers go through in silence.

After publishing my post, Nature Will Dictate When Is The Best Time To Go Back To Work, a reader named Mike reached out to empathize with my situation. In the post, I had written about constantly being rebuffed by my then 27-month-old son, despite only wanting to love and play with him.

As a father to a three-year-old son, Mike told me he hasn’t been able to connect equally with his son as his wife has. When his son was born, he decided to quit his job indefinitely to take care of him. He was burned out from work after 10 years and thought now was as good a time as ever to take a break.

At about the 16-month-old mark, however, he noticed a change in his son’s behavior. No longer did his son latch on to him. His son started developing a stronger preference for his mother, despite she having stopped nursing at the 12-month mark.

As the months went on, his son’s ambivalence towards his father grew. At first, his son would want to play with him for two hours before calling for mommy. Then that time period shrank to one hour, then to 30 minutes, and now only to 5-10 minutes.

It didn’t matter if he greeted his son with a big smile and a bowl of his favorite yummy foods. He couldn’t capture his son’s loving attention for longer than 15 minutes. At least 60% of the time, his son would also end up crying while with him to the point where he’d have to go away to prevent a full-blown, head-banging meltdown.

This, in turn, put a strain on his marriage. He started getting jealous of his wife for receiving so much of their son’s love. They were also constantly exhausted and never had any alone time.

Mike felt like a tremendous failure because not only did he feel like an ineffective father, he was no longer providing financially for his family.

After 18 months of being a stay at home dad, Mike gave up and decided to go back to work. He didn’t want to get rejected everyday anymore. He would much rather face the stresses of work.



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A Productive Morning May Make You Richer, But Not Necessarily Happier

Posted by Financial Samurai 40 Comments

The Miracle Morning Is True, But It's Not Entirely On Purpose

Let’s say the average person wakes up at 7 am to start their day and goes to bed at 11 pm. You decide to wake up at 5:30 am and work for 1 hour every day for a year because that’s what some productivity guru told you to do. You go to bed at the same time. How much richer would you be?

If your time is worth $100 an hour, then you’d be $36,500 richer than the average person over a year. Assuming your hourly rate and bedtime stays the same, over a 10-year period, you will be worth $365,000 more than the average person. If you slap on a 7% compound annual return during the time period, you’ll be worth $540,000 more than the average person.

After three decades of working longer than the average person, you will most likely be millions of dollars richer without needing to be any smarter! Getting richer than average is that simple. Just work more. Working 40 hours a week or less and then complaining why you can’t get ahead makes no sense.

Unfortunately, working more and being richer won’t necessarily make you happier. Instead, I argue that those who work less and can afford the luxury of regularly sleeping in have a much better life. Let me explain.



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The Largest Severance Package Ever For Destroying A Company

Posted by Financial Samurai 28 Comments

Over the years, I’ve received some doubt from three types of people regarding the feasibility of negotiating a severance package.

The first set of people I’ll call the holier than thou employees. They tell me that “they’d never do such a thing” to their employer, as if their employer was a sacred cow. But what they don’t seem to realize, probably due to having never experienced a recession, is that corporations won’t hesitate to lay them off as soon as times get tough.

The second set of people are those who do not know their worth. They are the type that let colleagues and bosses step all over them because they are too afraid to speak up. They also fear they do not provide enough value to warrant a severance, even though they provide enough value to have a job.

The final set of unbelievers are those who think they are God’s gift to their employers. They think they provide so much value they can’t fathom an employer paying them to leave. But what these people don’t realize is that it is precisely because they are so valuable that they have leverage to negotiate a severance to ensure continuity in the job. No employer wants to have its superstar employee leave suddenly and not have an immediate replacement. Further, once you indicate you want to work something out, no employer will want you to stay long-term.

Despite the doubters, I believe with all my heart that trying to negotiate a severance package is the financially savviest move if you plan to retire early, take a break, go back to school, or change careers. If you plan to leave anyway and if you negotiate the situation properly, there is no downside to having a conversation.

If I had not received a severance package, it is highly unlikely I would have left my job at 34. I would have kept on working until at least 40. When I look back and realize how much more stress and unhappiness I would have had to endure had I stayed for six more years, my severance package only appreciates in value. Being able to travel, pursue other interests, start a family, be a stay at home dad, and build Financial Samurai have been priceless endeavors.

Now that my severance negotiation book is on its third edition, I’ve heard back from hundreds of readers who’ve successfully negotiated between $10,000 – $700,000 severance packages. But in this article, I want to highlight the one that takes the cake.



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How I Convinced My Wife To Continue Working After I Retired Early

Posted by Financial Samurai 27 Comments

I have a guest post from one of my favorite bloggers, Joe from Retire by 40. Joe is good guy who also happily does his own thing. I’ve known Joe for about 10 years and we live quite similar lives. The main difference is that he was able to convince his wife to continue working long after he retired and I could not.

When I left my day job in April 2012, I kind of foolishly told my wife that she could also leave her day job before her 35th birthday. My wife is three years younger than me. As a champion of equality, I thought this was a pragmatic approach to a dual early retirement lifestyle. She actually wanted to quit her job at 31 when I engineered my layoff, so it took some convincing not to.

In retrospect, perhaps I should have tried to encourage her to work longer. Not only would she have helped narrow the gender pay gap by getting paid and promoted instead of the men at her firm, but she would also have allowed me to relax more, get six-pack abs, and not have to write so much on Financial Samurai!

Now that our boy is in preschool, I’m gently trying to convince my wife to go back to work full-time again. I’d like to take the financial pressure off my shoulders for a year and focus more time on taking care of the household. So far, I’m not having much luck.

Let’s hear from Joe how he did the impossible!

In 2012, I retired from my engineering career at age 40 to become a stay-at-home dad/blogger. However, my wife continues to work full-time. Everything is working out very well for us and life is awesome.

There are numerous advantages to having a working spouse. We have enough savings to support our modest lifestyle, but we don’t have to drawdown because my wife makes a nice income. Another huge win is healthcare. We’re using her employer-sponsored health plan so we don’t have to deal with ACA.

Our family life is way better than when we both worked full-time because I can take care of the home front. These are just a few of the benefits of staggering your retirement.

But is it unfair for my wife to work full-time while I enjoy early retirement? How did I convince Mrs. RB40 to continue working after I retired? Let me explain how.



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Examples Of Good Resumes That Get Jobs

Posted by Financial Samurai 159 Comments

Climb The Corporate Ladder

Climbing The Corporate Ladder

With cashed up corporate balance sheets and strong earnings growth, employment levels continue to improve across America. The latest unemployment rate has declined to 3% as of January 2020.

It’s in the first half of the year where ideally all hiring shall be done because: 1) The best available people are still available. There is a bias against people looking in the 3rd and 4th quarter because rightly or wrongly, companies will be wondering what’s wrong with you for not having found something earlier; 2) Companies need to spend their budgets while they are still available. There’s no time like the present; 3) Hiring an employee at the start of the year gets the most out of the employee, especially if there is a guaranteed compensation package.

If you find yourself looking for a job in the second half of the year, it’s important to hustle a little more or prepare for activity to pick up in the spring. Don’t give up hope. Use this time to plan more thoroughly.

I’ve seen over 10,000 resumes in my career and hopefully this article and subsequent articles linked within can help you out. An excellent resume should be standard.

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