Financial thoughts

Investments

• Every investment is a gamble.
• Low risk: I'm likely to win a little.
• Compound interest is the most powerful force over my lifetime of investment.
• Middle men eat the core profit that drives compound interest. Try avoid them.
• If there was a formula we could all apply, everyone would be doing it. I have to understand what works for me in my own context.
• Any investment that significantly outperforms the status quo will by definition become too expensive to invest in over time. For example buying real estate in my generation: it was a good investment for our grandparents, it gained value overtime. It's now valuable enough that it's too expensive for a similar class of people to invest in the same way today.
• I can't learn without trying.
• It is possible to lose all my investments even if I'm careful. Keep that at the back of my mind, and prepare a bit for this outcome.
• The consequences of my investments will be owned by someone else when I die. Probably a good idea to have a plan that helps those I love.

Real estate

• The house I'm living in is not an asset.
• Houses I own, and are not yet fully paid are not assets.
• Rental income for houses that are not yet fully paid is not profit. It is a reduction on my mortgage payments.
• Rental income for houses that are fully paid is not necessarily profit. It is first a cover for maintenance.
• Better to buy than to rent (for the same property) in the long term.
• Better not to buy than to buy in the wrong location at the wrong time.
• How I resolve the tension for the above 2 points is where my personal decision matters.
• Rentals are not passive income; I get out what I put in. Requires local knowledge, continuous attention, maintenance and re-investment.
• Everyone else cares less about my property than I do.
• Respect anything that deals with water. Insist on the highest standards for plumbing/drainage/moisture. If I don't, it will f**k me.