2020 has been an insane year for us, as well as for pretty much everyone. Here’s the scoop on our incredibly busy 2020.
Stupid Covid. For a good chunk of the year we have lived under some of the strictest government rules by our state government. Michigan businesses are shutting down by the thousands as we are legally prohibited from engaging in commerce across several sectors of the economy. We have done alright through this year, despite some reductions in work hours.
Although economically I am very fortunate, I did have my work reduced substantially this year. Normally I work about 72 hours a week for 10 – 14 weeks out of the year in both the spring and the summer. This spring I lost 2 of my 3 contracting jobs and I only had 3 weeks of work in the spring in total. Thankfully I qualified for unemployment and did end up receiving the $600 bonus through the summer. It took 10 weeks from the time I filed until I started receiving my unemployment benefits.
In the fall I worked the same hours as normal, although our project was reduced in size and scope and instead of 150 people we had 60 people total. The majority of these spots were not people who lost their jobs, rather it was people who otherwise would have been hired. We do a job fair for each outage and typically hire between 50 and 80 people. That didn’t happen this time. The plant I worked at took Covid very seriously. Every surface was constantly disinfected, social distancing and mask use was constantly reinforced, hours were staggered, and a lot of work was reduced or transferred into the future to minimize the number of people on site and their interactions with each other. We had plexiglass barriers between everyone in break areas and temperature checks and risk questionnaires everyday before starting work.
I was really worried about food shortages at the start of Covid and strategically stocked up on food. I did not buy the same “finished groceries” that most people were buying and that were running out. I went to Restaurant supply stores and bought bulk goods from them. I think everyone should have a 6 month food supply at home.
Mrs. C. had Graves disease eye surgery at the start of the year. Everything went well with that and she is overall doing OK. Her thyroid meds aren’t perfect, but they are better than what they have been.
I accidently stabbed my wrist with a window pane in April. Thankfully no permanent damage occurred and I was able to quickly stop the bleeding. The kids had broken a storm window I had saved from a rental house and I was removing the broken glass from it. I had most of it out, but 2 of the corners were stuck. I had leather gloves on and pulled the top corner. (right PPE, poor procedure) When it finally let go my wrist slammed into the jagged edge of the opposite corner. I immediately pulled my wrist up and covered it with my other hand to control the bleeding and asked Mrs. C. to get me some bandages. After about a minute I peaked under it and realized this was going to be a hospital trip. The doctor looked it over, cleaned it up, and stitched it up. I didn’t cut anything important, although I came really close.
Our youngest had a hospital trip in October. He was running to the van to go to Scouts and he tripped and fell, hitting his head on a rock in the driveway. He’s ok. Now I think all of these kids have had head injuries requiring a trip to the hospital.
Our oldest is out of braces! I also just made the last payment on them! Yay! We’ve spent right around $8,000 on his braces over the course of the last 5 years. His teeth are ridiculously straight. I hope that he continues to use his retainer as an adult so they will stay straight.
No one in my immediate family has got the Rona, so that’s good. I’ve been social distancing since I was 5 years old, so I’ve got this down. I am fearful of how this experience could be re-wiring our children’s brains, similar to how some children of the great depression became hoarders. I think we are accelerating these kids to shut in status. We are putting them in front of screens for far longer than they normally have, which was already too high.
Our kids have been home since March! We are so ready for physical school to come back. In the beginning the school gave them kids physical work packages then transferred to online schooling. All of the kids were given Chromebooks and had virtual schooling. This was easier for the older kids and harder for the younger kids. We first had them all set up on the dining room table with cardboard cubby separators to keep them separate but the noise level was too difficult to work out and eventually we transferred them to their rooms.
Virtual schooling, especially for younger kids is a tough ask. Our 2nd grader had 3 separate programs to use and had to be in meets at different schedules throughout the day. It was harder for him and for us to track his progress. One of the programs required kids to get 80% of each module right before moving on. For a more complicated module it might take 2 hours. If at the end of that 2 hours he got a 79% he had to redo the whole thing.
Covid cases have been on a downward trend and we are sending our kids back to physical school once winter break is over.
Across the country pretty much all kid activities have been shut down. Our kids are heavily involved in Boy Scouts / Cub Scouts. All the Boy Scout camps were shut down for the summer. By the time the governor allowed camps to be open, it was too late to get the logistics moving to hold camps. Mrs. C. and some other volunteers worked extremely hard to put on a summer camp for the boys. A local family with a large plot of land and a small lake / big pond offered to let us host summer camp there. Everyone had to wear masks and stay 6 feet apart, and there were a lot of other precautions taken. I’m fairly sure this group of kids were the only kids in Michigan and perhaps one of only a handful of kids in the country to have a summer camp experience this year.
Swing Set: At the start of Covid when I got laid off I built a massive backyard swing set for the kids. It feels like this was such a long time ago. This swing set is built to last and should get many years of use. The kids use it more than any of the other structures I have built (tree house, monkey bars, gaga ball pit, and rock climbing wall).
Painted main floor and replaced kitchen flooring: We repainted the main floor of our house this fall from a light blue to a light green. Our painting abilities are getting better. We also redid the flooring in the kitchen and dining room. The kitchen had a rolled linoleum floor and the dining room has a floating floor, that was at a 1/2″ higher level. We removed the floating floor and used a sticky back tile flooring over it. This took us about 3 days of work to do. There were a lot of cuts involved. Next up is replacing the countertop and the sink.
Painted Bedrooms: We painted our bedroom and the youngest kids bedroom this year as well. We also took up the carpet in the youngest’s bedroom to reveal a school tile type flooring. It’s easier to clean and play with cars on. His room is now red instead of a light brown and Mrs. C. and my room is a deep purple. We also got a Jack and Sally decal for our room.
Pond: Over the course of a week we built a small pond in the front yard. I dug out the shape of the pond, leaving a ledge in it and a deep end that transitions to a shallow end so trapped creatures can find their way out. I started small then expanded because the ground was relatively easy to dig. I lined the whole thing with concrete, then covered in a water proof sealer. The main waterfall piece is a piece of slate from my Grandma’s creek and the rocks around it are from Lake Michigan. We will finish stacking rocks next year. The plan is to plant some flowers to create a butterfly garden in this area.
Back Porch: Another roughly 2 week long spring was this back porch. We tilled up the grass, removed the sod, and installed patio pavers. A friend of ours built the framing and I did the roof decking and laid the shingles. This is something Mrs. C. has wanted for a while.
Pole Barn: We ordered our pole barn back in July. We did the dirt work to save some money. The company has been overbooked and started construction right after Christmas. We will get the concrete poured in the spring. Our pole barn will be 24′ X 36′ with 10′ ceilings.
Tile: We came across a Facebook post of a tile store doing a parking lot sale of $100 per truckload. This place is about a 45 minute drive from our house. They buy semi loads of tile and needed to reduce stale inventory. We ended up doing 5 van loads, with each one seriously challenging the payload capacity, even after removing all the seats. I priced all the tile and estimated the ones I couldn’t find comparables for. Ultimately it was about $15,000 of retail tiles. Some of the tiles I got were a Travertine backsplash, worth around $1,000 of the total. I sold these for $350, changing the overall deal to $150 for $14,000 of tiles. My garage is full of tile and I really need a pole barn. A big reason for getting the pole barn is so we can stock up on building supplies when they are on sale. Had the pole barn been up I would have done another 5 trips. I now need to learn how to install tile. We have floor tiles, shower tiles, and wall tile.
2020 Rental Houses
Rental #4: We finished a rental house in February that we had worked on all winter. We closed on it on Halloween 2019. This house needed the basement gutted, new drywall, water heater, floors redone, walls and ceilings deep cleaned and repainted, and tons of other odds and ends. Ultimately we did a cash out refinance which left us with no cash in the property and a positive cash flowing asset.
Rental #5: We bought this house just days after renting out the other one. We had to do far less work on this house. We had to rebuild 1 room, create a laundry area, replace some windows, and do some odds and ends. The most expensive part was a new well pump and bladder tank. We did a cash out refinance on this one which was not as successful as the last one. We ended up with around $13,000 of cash stuck in the property because we had an appraisal that was damn near criminal. He compared our house that was rented out at $1,000 a month to repos that were unlivable and much smaller. One of the houses the bathtub had fallen into the crawlspace. He then refused to budge his assessment after our appeal. Our options were to get the loan for the lower amount or to restart the loan process with another bank. We chose to bite the bullet and leave some trapped cash on this one. Still, getting a 50% cash on cash return is pretty darn good, not infinite, but still really good.
Rental #6: We just closed on this house a few days before Christmas. Inventory has been very low and houses have been selling at higher prices than normal in 2020 in my area, which is why it took us 10 months from our last purchase to buy this one. This is a 3 bedroom house that I could turn into a 4 bedroom in the future. It’s dated, and needs some work, but is not a full rehab. We should be able to get it rented out by the end of February. We are also ready to buy the next one and are actively looking.
2020 Side Hustles:
eBay Selling: Done/Greatly Reduced: I’ve stepped back from our eBay reselling. We were having issues with getting more stock and we had an ever increasing pile of items that were not selling. Overall we profited about $1,500 this year from our eBay reselling. As far as effort required to reward this is on the lower end so we will have less focus on this in 2021.
3D Printing: I have our 3d printers set up and need to find another good product to sell. The face mask ear savers worked well for a while and paid for the printers and brought us in over $1,500 in profit. My printer broke and I let my main listing lapse. By the time I got my printer fixed my listing had expired and it fell in rankings quite a bit. For a brief period of time I was getting over 10 orders a day. When it fell to 1 or 2 it really wasn’t worth it. Currently this side hustle is paused.
Amazon FBA Reselling: Our main side hustle focus right now is on Amazon FBA reselling. We have started with books and are working on getting our inventory up to over 500 items.
Cricut Making: Coming soon: We bought a Cricut Maker on Black Friday and are looking into different business options with it.
Keeping up with blog: This year I’ve written 40 blog posts! This greatly exceeded my goal of 1 every other week. I covered several important topics and have expanded my knowledge on finances substantially during this year. My blog traffic is still down from its 2017 peak. I’m at roughly 6,500 page views a month.
KDP Financial Notebook: I wanted to get started on Amazon Direct Publishing. I created this financial notebook to sell on Amazon, which is an excellent tool to help with building wealth. Each month has a balance sheet, an income sheet, several key questions, and note space. It’s much easier to build wealth if you measure it and give yourself direction. I find I do a lot better filling out a physical notebook that stays on my desk than updated a series of spreadsheets. Each Financial notebook is set up to cover 1 calendar year.
KDP Generational Wealth Book: I’m working on my first book and have a rough draft manuscript completed. It’s going to go through several rounds of editing before I publish it, but it will be published in 2021. This book is focused on building generational wealth.
Although I like index investing, my individual stock portfolio has vastly outperformed indexes this year. New investments are still being split with the first 10% of my income going to index funds before I invest any in individual stocks.
Tesla: I’ve been a Tesla investor for a long time. I own a lot of shares and this year Tesla has exploded in value. I invested $12,000 in Tesla when the market cap was in the $30 Billion to $40 Billion range. I expect that there will be a pull back over the next couple years due to this massive runup, but in 10 years I think Tesla will be worth at least 5X its current value.
Whirlpool: Whirlpool is headquartered in Benton Harbor, MI and my dad worked there for 25 years. In March at the deepest point in the early Covid panic when the markets crashed I saw that WHR stock had fallen to around $65 a share. It’s P/E ratio (Price to earnings ratio) was 4, which means it was trading at 4 times its projected earnings. For comparison, Apple stock is currently trading at a P/E of 40. This was a killer deal. Historically Whirlpool has been fast to react in economic downturns and this was no exception. I invested a good chunk of the available cash I had at the time, which was around $3,000. In retrospect I wish I had went all in. Whirlpool doubled in value by June. I sold those shares and reinvested some more in Tesla. Since then Whirlpool continued to climb and has been trading at around $200 a share.
BP: I bought BP stock in October. I thought at $16 a share it was highly undervalued. It was $38 a share in January and $17 a share at the bottom point of the Covid market drop in March. I bought at $16 a share and sold in December at $22 a share to buy Quantumscape. I felt that a 37% return in under 2 months was really good and I should take profits with that quick of a runup.
Quantumscape: I bought Quantumscape the day after the IPO. This is a battery company that has developed a solid state battery. They have backing from VW and will likely be a big VW supplier down the road. I bought at $40 a share. In the subsequent weeks it has skyrocketed to over $120 a share with a market cap higher than Fords. I think this is batshit crazy, but I’ll roll with it. I sold about a third of my holdings to get back my initial investment and kept 100 shares.
Jumia: I invested in Jumia stock at the same time as Quantumscape. I’m a bit late to the party I feel, but over the long term it could perform well. Jumia is the current dominant e-commerce player in Africa. I bought in at $29 a share.
Desktop Metal: I love the idea of large scale 3D printing. Desktop metal IPO’s last month and they build large scale industrial 3D printers that print metal production runs at speeds 100X faster than traditional 3D printers. I think their technology can fundamentally change mass production of parts. Desktop metal is the leader in this space and I think this market segment will explode in growth. I bought in at $17 a share.
A word of caution: Individual stocks are much more risky that index funds. For the past 4 years I have primarily only owned 1 individual stock, Tesla. Spreading individual stock investments over several lowers your risk. It’s important to do your own research before buying or selling any securities. All of these transactions are done inside my retirement accounts.
Self Directed IRA: I set up a Self directed Roth IRA this year. The process was more intensive that I thought it would be and at this point is more hassle than its worth. As time goes on and I get more money into it it will make more sense. Essentially I paid a 1 time fee of $1,000 to set it up, plus $180 per year in continuing fees, regardless of the balance. I had to set up an LLC bank account locally, and now I have the ability to write a check to invest in non traditional assets. The intention I had with setting it up was to purchase vacant land real estate at the tax auction and sell it for a profit later on. By doing this inside a Roth IRA I avoid some tax issues and shield massive gains. An example would be a piece of property that sold for $50 a few years ago at the tax auction resold for around $12,000. Another investment option is early investing in microcap companies through Start Engine.
Roth Vs. Traditional: For the past several years I have not had to pay federal income tax. Between having 4 kids and contributing at a high rate to tax deferred retirement accounts we have been able to have no federal income tax liability. I have come to the conclusion that this is short sighted and I have switched my retirement funding from traditional accounts to Roth accounts. Thankfully my 401K at work offers a Roth option so I will be able to use than in 2021. Tax rates are relatively low now and the total taxes will be much higher on the growth in the future, both die to a higher balance and higher tax rates. The feds also killed the stretch IRA which made traditional accounts devalued from a generational wealth standpoint.
I had originally planned to do a Roth IRA conversion this year, however with the massive runup in value since March, it isn’t as practical. I will look for options for Roth conversions down the road.
This year I’m going to turn 35. My oldest will turn 18. I’m getting older and although I sometimes feel like my body is getting slower overall I feel like I’m just getting started. I still have a drive to move forward and get things done and I’m constantly excited about new opportunities. Over the last 16 years Mrs. C. and I have built a very strong foundation and over the next 5 to 10 years the skyscraper is getting erected. It would be easy for us to decide to “coast FIRE” and live primarily off of our rental income. I plan to continue to work hard for at least the next 5 years. We have reached a high savings rate and the money we invest now will grow into millions down the road.
For 2021 I am focused on a lot of financial goals, but I also need to reset and focus on some physical goals. With the quarantine as an easy excuse I have gotten further out of shape and have put on another 10 pounds of non-muscle weight. I haven’t done a true focused exercise program for years and its starting to catch up with me.
Plans for 2021:
Buy 2 – 4 more rental houses: This is as deals and financing allows. I’m ready to buy another house right now. If I buy another one in January we can do cash out refinances of 2 houses in July, allowing us to buy 2 more with the same cash, which would put us at 3 for the calendar year. Then we should be able to buy a 4th with cash flow from the all of our rentals by the end of the year. In January of 2022 we can cash out refinance the 2 we buy in July and keep on growing. We can buy 4 houses in 2021 and should be able to do at least 5 per year for every year after. Not too long ago I thought the idea of buying 1 house a year was extremely aggressive.
Publish generational wealth book: This will be my first real book and I’m looking forward to getting the finished product ready. Long term I would like to write more books. I like the idea of royalty income, especially with how long copyright laws are good for. Long term I would also like to invest in existing royalty producing assets, although the price for these has been on a strong upward trend over the last couple years.
Build our Amazon reselling business: The big goal of this is to get to a point where we can hire our kids to do a lot of the work and pay them, giving us the ability to fund Roth IRAs for them at a young age. For this year I would like to get up to $12,000 a year in volume and be ready to double that for 2022.
Go to Universal Studios: This is highly dependent on the world Covid situation. So far I have about $3,100 set aside for this trip, plus lots of hotel points and credit card points I can exchange for cash. My goal is to actually buy annual passes, allowing us to go in the late summer, again in the winter, and a 3rd trip in the early summer of 2022.
Finish pole barn: Once the pole barn is built I am going to build a lot of shelves for it and wire electricity to it. Getting stuff moved into it from the garage will be another large undertaking.
Finish kitchen remodel: Our kitchen still needs new countertops, a new sink, and refinishing the cabinets. Ideally some of this will get hired out.
Exercise regularly: I know I’m not going to workout for an hour a day, It’s been 7 years since I did P90X and I really don’t have the attention span for it. I plan to start off slow and work out for 30 minutes 3 times a week. By the summer I’d like to be able to run a 5K in under 20 minutes. Right now I doubt I could run a 5K without stopping a half dozen times. For someone who used to run 50 miles a week, that’s disappointing.
How has 2020 gone for you? What big plans do you have for 2021?