Saturday, June 27, 2020

This time it's different

The last time we retired was back at the end of 2017, we spent some time back in the UK seeing our families for Christmas and then proceeded onwards to San Luis de Sabinillas for a month on the south coast of sunny Spain and from there Dividend Nomad was born. I remember it like it was yesterday, heading out on a fine sunny January day to my favorite spot on the veranda where I used to sit there in the sun pondering the stressed out, burned out world of corporate USA we had just left behind. Aaah bliss.

The current freedom and the feeling that you'd aced the game, scaled the mountain etc etc.

You could call it smugness or some other negative perceived emotion but in my defense I did keep it all internal, so maybe it get's a pass as just a form of internal congratulation.

I do remember thinking as time went on though how I'd fallen into the same trap all over again. By nature of my glorifying and patting myself and Mrs DD4L on the back for a job well done how was life any different to the corporate world of pressure and deadlines and the associated success versus failure?

All FIRE had become was yet another, be it longer term this time, deadline. Like most that had gone before it my boss would have been briefly happy with the accomplishment before turning me loose on yet another considerably larger challenge to make my already burned out life miserable again.

Psychologically by becoming FIRE my corporate-ingrained personality type was such that it would be waiting for the next challenge very soon or my reward-dependent ego would create merry hell and make me depressed.

This FIRE was good for a couple of months and riding this high has been great but what next?

But for some of us, beyond corporate life there is no real "what's next?" up that mountain. Been there done that. No need anymore. That's it pretty much unless you count seeing all the countries of the world on your bucket list or creating a new, entirely different pathway but with the same deadline-pressure thought patterns.

So how do you satisfy your mind and ego in that instance? How do you stop the silly Jack Russell terrier yapping away at the backdoor wanting to be unleashed on the next opportunity to again prove it's superiority to the world?

The fact is I had no clue how to stop those thoughts and after a time I began to get restless again, thinking I needed this all to mean something. I had to have retired to something? Right?

Looking back though I now realize the ego was still heavily in control, I was never destined for Slacker FIRE happiness until I could 100% dismiss it and send it on it's way. Dividend Nomad was doing no favors to that effort, with it's self-imposed bi-weekly deadlines to come up with content, writing the book, seeing the world. It was all the same damn thing but without the boss breathing down my neck anymore.

I also had the belief that Dividend Nomad had to be a money making venture so set it up as quickly as possible with google advertising. Again another measurement of success versus failure for my ego to hang it's mood on. Along with all that comes the Social Media presence to boost traffic and likes of the pretty pictures from where we traveled, not to mention the dreaded twitter feed that never felt in any way in tune with my personality.

There was no way my FIRE experience was ever going to be a happy one with all this going on...the mindset was the problem. The whole venture was all based around success versus failure and FIRE is not that, at least not to my mind. I just didn't realize that yet back then.

In fact the only discovery came as we were heading towards the Sahara Desert for the camel ride finale of Dividend Nomad. It all had to stop. The Social Media, the constant pressure to produce original content on a bi-weekly basis, the updates of the portfolio, the judging myself based on the success versus failure (dividend cuts) of the stock picks. It all had to stop. Or at least continue on without my efforts. It was time to get off the roller coaster of emotions and get the ego in check.

So stop it all we did. Dividend Nomad is no more, social media be it Instagram, Facebook, Pinterest..and the dreaded Twitter..all profiles deleted. The book even got pulled from Amazon because even it had become a success versus failure barometer so it too had to go.

Wow what a relief...we finally got off the roller coaster.

Only then by mid 2019 did the relaxation really start. The big switch-off kicked in and life really began to make a lot more sense. The Southport apartment rental was nearing completion and ready to start earning us income too. We then proceeded from October to hang out at the pool of an Airbnb in Davenport, Florida for a month, walking or taking long runs around the subdivision, watching the Cranes and Egrets and enjoying the sun. Walking around Disney Springs while the world was hard at work. Life truly was pretty amazing. This was what FIRE was all about.

But the ego wasn't done yet, not by a long shot. That inner yapping Jack Russell was having none of it. We needed to invent some mystery goal we'd never achieved to prove something that on reflection never even needed achieving.

We'd never worked a US military aircraft contract....and that mattered why? To keep our skills going because fear-driven ego told us we could risk never working again and would run out of money. So off to Oklahoma we jolly well trotted. Set ourselves up in an apartment and proceeded to again satisfy the ego with more deadlines, more pressure, more scope for burnout...would we ever learn?

It was only during that time though that we finally got to understanding the ego acknowledgement process. The basic premise where you simply acknowledge the thoughts that are your ego and let them drift by and don't act on them. Also cut yourself some slack instead of being a bull at a gate all the time constantly trying to prove yourself.

That it? Really? It's that simple? The key to a happy Slacker-FIRE is to simply acknowledge ego-driven thoughts (be they fear, gloating, greed, jealousy, you name it) but not act on them? Then you'll be happy and finally get to enjoy life for real with no nagging doubt?

Well yeah, pretty much. Seems to be the case.

Oh and regular exercise, meditation and yoga still seem to help a great deal, a regimen that got kicked off in Oklahoma and continues today in FIRE....the second coming (let's not need a third please)

This time it's most definitely different. The pressure of blogging success doesn't exist anymore, in fact the pressure to be any form of success or perceived popularity goes the same way. Not necessary. Nothing to prove no matter how persistent the ego becomes, and rest assured it will always be there. Most likely still the reason I'm typing this right now.

One of the best examples to think about ego's silliness is like when people support a sports team and and the ego treats it's championship success or failure like an extension of themselves. A situation the fan has zero control over but still the ego hands down a depressive sadness in the event of failure. We humans sure are strange creatures..I'm neither a quarterback nor a star striker but the ego seems to think I should be in order to affect the outcome of a championship. How very odd.

Part of the human existence seems to be learning that life is a constant voyage of self-discovery and enlightenment. Right now the discovery of ego and the acknowledgement of it's many oddities that affect day to day life and subsequent decision-making is the current chapter we're working through.

Last time FIRE for us was a trial run but this time it's most definitely different.

Love to all,


Friday, June 26, 2020

Why bother blogging?

Going to start this post by pondering the above question. I mean it would be easy right now to continue with blogging retirement (beyond early retirement that is) but to be honest something's been sitting in the back of my mind bugging the crap out of me.

There's this idea now that's settled in that my old boss and his type will be sitting there all self-satisfied with themselves due to the pandemic, resting easy that the idea that FIRE is dead. RIP FIRE with accompanying maniacal laughter (well, I never said the guy was sane) No longer will any of us stooges even dream of early retirement because the next pandemic could be just around the corner, ready to scoop up our hard earned savings and dump us back on the street.

As you can see the world needs FIRE bloggers more than ever, even if it's just to have everyone to quit reading the media fear machine, chill the f out and demonstrate that it's all still possible. It's just that now it's more important than ever because...well, look at the damn unemployment figures for crying out loud. They pretty much binned EVERYONE the moment the economy took a dump. What the actual??? Passive income is critical now more than ever. 2008 be damned, this is the real deal.

So...yes I just quit my well paying secure job in the middle of a pandemic, but I had a lot of faith in the return to FIRE status because we'd already done it before. For the record I've sold some dividend stocks for companies that decided to "reset" which is the new buzzword for dropping you down a paycut. A lot of them pissed me off too because their balance sheets were not even justifiably bad enough to not hang tough through the worst of it. I'm still ok with dividend suspensions as long as we carry on where we were beyond the second wave if that's where we're going.

In better times I was going to keep most of these companies through thick and thin, turns out the downturn makes you think entirely differently. Especially when you notice all the Preferred's continue to pay or suspend cumulatively while the common get's it's a$$ handed to it. So stepping into the DeLorean and reverting the portfolio back to 2012 made a lot of sense, it was my own fault for getting too fast and loose and top heavy with common's. My mistake, lesson learnt moving forward.

As for work I still find myself wholeheartedly disagreeing with Kurgan's theme by Queen from 1986 song Gimme the Prize:-

"I have something to's better to burn out, than to fade away"

Screw that noise. Nope, not buying it Kurg's, fading away suits me just fine...

So if we need to crank the blogging machine back up to remind people there is still hope and your boss is still wrong with the worst fears mind-melt then let's just get back on with it. Also looking to be a bit more ego-conscious as the world has plenty enough of that going on, overdue time to put it in reverse. You still won't find the site on social media desperately seeking likes or little hearts because it still doesn't believe in any of it anymore. Coming up to one year social media free and don't miss a single nano-second of it.

So far so good on ditching bluehost too, had to pay a fee every year to keep Dividend Nomad going so not very FIRE friendly is it...No more!! Blogger is free so if I choose to take a bit of time off and not blog for a while it's fine. Even the DD4L domain name was bargain bucket half price off.

Anyways just thought I'd put something together now that I'm starting to really feel FIRE free again, been out running one day on one day off here on the Isle of Wight since the bike is still at Mom's house up north. No more daily schedule meetings to dread. Looks like we'll be IOW residents for a while now all being well and that suits just fine. Love it here.

On the subject of stocks I just sold out fully from Armanino Foods of Distinction due to their dividend "reset" and pivoted to the still paying cumulative Preferred G of EPR Properties for just over $18 (EPR/PRG). Yes EPR is still a kinda shut shop-ish but I still believe that Top Golf and Cinema's will be back someday. Call it faith in my fellow Americans.

Also in the Roth after the AMNF ditch off I picked up some natural gas utility Spire Preferred Series A (SR/PRA) again going all for the Preferred's in lieu of some of the long held dividend payers that can't survive worst case conditions.

Did consider resumption of publishing the entire portfolio which is now on to about 170 stocks but what is concerning is the idea that anyone will copy an idea while it is in such a state of flux right now. I'm honestly dropping any common dividend resetters like hot sh#t and swapping for Preferred's so would feel hard core guilt if anyone copied and lost out as a result. Maybe scan Quantum online filters to crib similar ideas?

Long EPR/PRG and SR/PRA.

Love to all,


Monday, June 8, 2020

The Deed is done!!! - Savasana part 2.

Well what can I say? Other than that a lot has happened since my last post on DD4L..

I'm back retired again!! Yehaww!! Felt like it was never going to happen.

To be honest I quit writing about the big build-up to re-FIRE because it seemed to be putting way too much pressure on the process and as a result flights didn't seem to be happening. Very frustrating. We were going backwards and at times it felt like I would be stuck working forever.

In the end we wound up re-booking our flights to return from Oklahoma City to the UK, Delta made one final change too many with flights rescheduled last minute via Minneapolis and Detroit that were just too unrealistic. We cancelled and switched to whole new flights on American Airlines via Dallas/Fort Worth to London Heathrow. These flights were way more realistic since they were actually happening regularly.

So the 2 weeks notice went in to the employer, we sold the Toyota Corolla to Carmax for a decent price all things considered and got on with the task of bidding a farewell to OKC.

In the last week or so we did start to have our doubts about whether we were doing the right thing? It is a little against the grain of conventional wisdom really to quit a job during a pandemic to return to passive income in a country still locked down, especially with all the dividend cuts and suspensions that have been hitting lately.

......but whoever said we were conventional? FIRE in itself isn't even conventional. Quitting your job early flies in the face of our social and news-media driven fear-based modern society, that's the main part of it's appeal.

Fact is all we were really doing was quitting to return to our regular FIRE lives that we were taking a brief sabbatical from.

Beyond that though I can admit now that I was actually getting ever concerned about either of us catching Covid in the USA where high deductible-out of network medical bills can pretty much bankrupt the unsuspecting, extinguishing any FIRE aspirations immediately in one foul swoop. Not worth the risk..sorry, we've come to far to have it all snatched away at the last minute. The USA had to get smaller in the rear choice.

So fly back here we did, landed in Heathrow and grabbed a cab for an hour to Southampton. All of this masked-up and social-distanced to the hilt. Actually was quite a relaxed and common sense process that seemed to go pretty well.

As far as the UK goes our existing Southport apartment that we completed work on last year is now rented out so we had the opportunity to clean slate it this time around. We decided to clean slate in the Isle of Wight off the south coast of England in a town called Cowes, the same sailing town where the yacht racing happens every year (Covid permitting)

Additionally in that process we took away the healthcare issues and returned to the free, more early-retirement friendly National Health Service model. At least if anything does go wrong we now have a chance to be taken care of with less chance of FIRE being financially jeopardized.

We've been in Cowes about 3 days now and initial impressions are, well pretty cool. There are a lot of steep inclines so our fitness levels are definitely increasing rapidly which is a good thing after 3 years spent in the flat, pancake-like lands of OKC and Southport UK. As I type we are sitting in an Airbnb for a month priced at 1100 GBP for the month (usually about 900 GBP per 2 weeks in a non-Covid world) beyond this we are trying to lock in a 6 month rental for about 525 GBP per month which coincidentally is the exact rent figure we receive from the Southport apartment. Perfect swapsie scenario.

If we can lock in for 6 months our thought process is that sees us through the other side of Christmas on this new little island home of ours and get's us back to 6 months UK residence to facilitate cheap travel insurance from here. IOW also feels a lot more of a place we would be ok to be locked down in this time around, the US lockdown like I say was way too insecure. One ICU visit with potentially a month on a ventilator would take quite a chunk of change out of the funds. Every grocery visit was just this huge paranoia-fest that we were going to be heading to the ICU with the Rona.

Those concerns do now seem to have abated a little, such that in the event we need to stick it out here on an island of 120k people longer term than imagined to get us through any potential second wave then so be it. Not ideal, would still prefer to winter in Spain as usual but these are black swan times we're living in and adapting is necessary.


You may recall my previous blogging name was Dividend Nomad? While that chapter is now history and firmly in the past there is still a part of me that feels like the Covid world changed a lot of the dynamic with that lifestyle anyways. I had zero clue how a pandemic could alter that Nomadic lifestyle until now. Seeing a lot of my previous blogging counterparts stuck in parts of the world with questionable China-leaning brush-under-the-carpet responses to the whole pandemic had me really beginning to question the whole Nomadic lifestyle more than ever.

The premise of Nomadism is freedom and pandemic lockdowns struck right at the core of that freedom in a heartbeat. From our own perspective the UK-based travel insurance we were carrying to live in the USA even made us into naughty children that needed to get back to the UK or they would drop coverage immediately. We scrambled for the best US short term medical alternative we could muster, hence the subsequent paranoia generated. In all honesty while being the best we could find for our sub 1 year in the USA the insurance did carry with a lot of horror stories of non-paying in Covid cases. Yikes.

The question really is will any of the travel insurance companies even cover pandemic from here forward? Also in the event a Nomad chooses to "go it alone" how will that play out when you're thousands of miles from home locked down in a lesser developed nation that doesn't want to offend China by acknowledging it's death rate. The reality you now face is being stuck in one of these places having caught Covid and hoping for a sufficient level of care to get you through. My guess is you need to have one eye on a potential exit flight at all times.

I suspect we'd be fine stuck in Italy, Spain, France, even Turkey but I'd be lying if I didn't say a lot of the less, shall we say hygienic places concern us greatly now.

Does this mean we sit on our little island and go nowhere now though? In fear of a 2nd wave? Or  some new bat flu?

No. Life is for living and fear has no place in our lives despite the mainstream media's best efforts to convince us otherwise. From here it simply alters the way we think about travel and the destinations we are heading for, making us just a little more wary perhaps.

We're not saying Nomadism is dead in the water, just that it likely has to be thought through more in a common sense way and that we've added an extra "what if?" to the questions buzzing around our heads. Additional to the riding of scooters, eating that street food and staying cool when the Dubai flight goes over the war-torn middle east airspace etc.

I digress...

Elated and couldn't be more proud to be back once more a FIRE early retiree tip-tapping away on the laptop and yes in this insecure pandemic world. It's still exciting, still love it and still recommend it to anyone!

Love to all,


Sunday, May 10, 2020

Covid trades and emotional attachment

Yes I know, I know the worst thing you can do is get emotionally attached to stocks....I know.

But the thing is when these little champions are paying your FIRE wages it's possible to argue you can't help but get attached, it just goes with the territory. I mean you spent the time researching, hunting down the good deal at the ideal price, following the quarters so you've got some skin in the game. Then you spend each quarter checking out the Charles Schwab history tab and see them paying into your account with a wry smile and happy vibe. You may have gotten a really good deal and watched the stock sit in the green for quite a while, your ego giving itself a well earned pat on the back for being so savvy.

But then along comes Covid-19 or a 2008..

The emotional attachment then has to go out the window, sh*t get's real if you'll pardon the crass expression. Decisions need to be made when the day of reckoning arrives and from then on it's survival of the fittest.

The point of this post is we lost a few good foot soldiers recently in the Covid portfolio battle. It felt like those times working when an old friend got laid off and it was like someone removed a part of your emotional centered stability. Very sad for those of us who unintentionally become emotionally attached to our companies.

First there was the bye bye to Royal Dutch Shell, this was a tough one but it's been time to say goodbye for some time if we're being totally honest. No offence but they've been a bit too fast and loose for us for quite some time, did themselves no favors with the attempt to re-domicile the entity back to native Holland and with it drag us into their tax bracket. Management got overruled back then by the world investor voting community and it's common sense so normal service was resumed, however the dye was cast. RDS.B was on borrowed time. Then Covid and this time it pulls the rug from under our poor UK pensioners who all the oil majors know rely on the dividend for their pensions at their time of most fear and vulnerability. If the earnings call was scary it would be understandable but even then a scrip would have been acceptable, give us a few shares in lieu until you find your feet. Nope hack job on the dividend ensued and some (us) would argue needlessly. Time to say goodbye (waves like Granny at the end of the Beverly Hillbillies credits)

Sticking with the UK it was also time to bid adieu to our long time holding in UK bank HSBC, through no fault of their own too which really sucks. The UK government instructed poor HSBC to drop their dividend for the remainder of the year. This level of meddling is not acceptable and we feel bad for HSBC but it is what it is, they have to go because we can't account for this type of government intervention in our income stream.

Next on the chopping block was Centerpoint Energy. Since they took over high quality name Vectren we've had high hopes, some would say pie in hopes for them but this has fizzled out to quite the mismanaged letdown. Understanding that oil prices were deep in the toilet at their MLP but even still there was more to this in our minds, an opportunity to hack the dividend to cover up sloppy workmanship internally maybe? The CFO departure bears testament that all is not good over at CNP. We're letting the Preferred run on for now, got a good 18 months left to sell it off before it get's flipped over to the common but most likely that will experience Granny wave too...Uncle Jed would be proud.

Next two (said this was a rough time) were both Westrock (WRK) and Welltower (WELL). The former should be rolling in green right now due to the stay at home demand for their corrugated cardboard but it feels like they took the opportunity to hack their dividend even though their news was not really bad.
As for Welltower it was a good opportunity to set them adrift when they go dividend choppy chop and you've got plenty better like MPW, PEAK and VTR in the space that are performing and for now keeping the ship upright a lot better. (trying not to speak too soon obviously)

One of the largest holdings and bitterest pill was NRZ. We loved ourselves some New Res with Mike Nierenberg at the helm but his masterplan was scuppered by FED heavy-handedness and the calls just mounted up to too many resulting non-agency debt sells. The portfolio is now decimated and with it the business model is now changed for good and doesn't meet up to what we want anymore. Especially when you look at ABR and what Ivan Kaufman's doing over there, even Leon Cooperman is a fan evidently.

That's pretty much all the sells for now, brutal to be honest but necessary. The next quarter should be interesting when a lot of our businesses have been sitting empty for the longer time period but hoping for the best still. The ones with the most common sense have already suspended the dividend which ironically we don't mind, the cuts are what we actually mind because they are more permanent. technically. Resetting dividend growth is a bit of a meaningless exercise, we might as well be buying a Preferred and flattening out the curve with a higher yield in the first place, makes no sense.

On that same subject the Portfolio has effectively stepped in the DeLorean and begun to resemble a little more like our 2015 version. Like a DGI-Preferred hybrid mix. Reason being thus far the Hotel Preferreds have continued to pay or stopped cumulatively while the commons have been suspended indefinitely. Maybe we should have stuck to the 2015 model on reflection but hindsight is awesome.

With the proceeds we've been stocking up again on those long Cumulative Preferred's. Gladstone GOODM, GOODN, RILYP and TWO/PRA. TWO have ditched most of their non-agency MBS so are now a little more investor-friendly. Overall the decision is that we are no longer going to take it personally when call dates happen, just keep flipping Preferred's over and hang on longer term.

This doesn't mean we're now anti-Dividend Growth, quite the contrary we also added to PPL and some VTR and T. We're just being a lot more conscious about where we purchase and if we're taking on too much risk. Boring it may be from here forward so many apologies in advance if the blog now becomes a little more dry when detailing it's purchases. Less juicy dividends more military and utility stalwarts.

Moving forward the hope is the portfolio emerges from the Covid battle more of a lean machine ready to aid us through a long term retirement with less thoughts turning to work. Just can't do it anymore really, this time around really has to be it.


Love to all and stay healthy out there,


Friday, April 24, 2020

Putting the Diversified in DD4L...

(*Post introduction music - I got you babe by Sonny and Cher)

Welcome to Groundhog Day!! Phil...? Phil...Connors?

Since the last post life in the DD4L household is pretty much the same and has been every day and as it turns out that is just fine, it's actually good to be sat here locked down in our apartment with Mrs DD4L. Periodically relaxing on the balcony in the sun listening to the local birds of Oklahoma. Also taking great comfort in the fact that the moment lockdown is done then I'm retired...officially. Out again..done so lots to look forward to, for now just take it easy and let life happen. Surrender is definitely the key here, meditate on the breath and relax.

The flights we had booked back to the UK for the end of April never happened so we rescheduled for
June 5th. Will even those happen? No idea. Not up to us and the realization is now that it never was, we were delusional in thinking we were in control of the situation.

To stay true to the name of the website I'd like to report more trading in the past month, but that would be an untruth. Since all the purchases from mid March the portfolio has pretty much encountered a lockdown all of it's own. I actually think I'm done purchasing for some time now, indeed quite the opposite phenomenon has occurred and a large scale stockpiling of cash has begun, filling the void left from all the purchasing. It's almost like it no longer matters what gyrations the markets are experiencing, we're now fully backed off and what will be will be. Bargain buy and hold has kicked in. Cash is now king for now and the foreseeable longer term future.

There have been plenty of dividend suspensions now with the last one being Las Vegas Sands (LVS) which is quite rightly due to the fact that the casino's, like their hotels are sitting empty. I can't by any means get mad nor frustrated at Sheldon Adelson (Mr Yay Dividends!) for using his god given common sense and preserving the cash pile. Same goes even for Invesco who have reduced their dividend as a result of folks running screaming to the hills and abandoning their portfolios. This is a black swan event and any cash preservation by affected industries is perfectly justified. That said I understand perfectly if my fellow retail investors wish to sell, nobody knows another's circumstances and cash might be tight right now after a furlough or worse a job loss. Survival mode brings out whatever reaction it decides. Best of luck to all. 

So as it stands we're scouting around for some CD's to park any future wages, dividends, interest or rental income that might come our way. Something like a Goldman Sachs or Discover 5 year ladder maybe, have to keep a watchful eye on and be ready to pounce.

On the positive too the 2nd income property, Southport UK this month starting to produce cashflow via
the new tenants which was nice to see considering the melee and confusion out there. This means when we do return to the UK we need to find a temporary place to rent as we search for property 3 on the south coast of the country. First world problem producing zero complaint.

This example dovetails us nicely into the point of this post. Diversification.

For it is in a black swan event such as Covid that diversification becomes the lynchpin of your entire FIRE income enterprise and keeps the unwanted job at bay (assuming one is available....) 

Sure enough those hotel, restaurant and casino dividend-producing investments were an excellent addition to the portfolio when times were good and money was flowing with high employment but right now the opposite is true. Now is the time you hopefully thank your past self for diversifying out to the Proctor and Gamble's for the Charmin toilet roll, the Unilever's for bleach spray, the Colgate Palmolive's, utilities like Southern Company and American Electric. These are the companies who should now step up to the plate and keep raising the dividends to pick up the slack for the pauses. 

So does this mean we run scared of all tourism, hotels, restaurants and casino's from now on? Once bitten twice shy? Not at all, everything has it's time and place and these industries will come roaring back at some point, just not here and definitely not right now. Maybe not for a while but patience young Daniel-San. Buy low for now and chill ignoring the short term pain if funds allow such extravagance.

Same goes for the rental income, now and moving forward it becomes ever critical to understand the source of all the income we take for granted, run the analysis and take the lessons. In rental income terms it's important to recognize exactly from where the income originates and decide if it is reliable or not during a black swan. If your AirBnb is susceptible to zero income during lockdown then it's important to complement it if possible with other properties containing more diversified and reliable sources of revenue. Does this mean we fear and give AirBnb a wide berth from here? Not at all, again patience Daniel-San, normal service will resume at some point.

For our example the USA rental income comes from a College Tennis Head coach, is this a reliable income source? Hard to say. All college tennis is rightly on lock right now as with most sports and unlikely to return before 2021 so the decision here is entirely with the college to decide if our tenant is employed or furloughed? Our rental income in turn rests on this decision and this is also where paid off property is king. When the taxes and overheads are all paid it's more straightforward to cut the tenant some slack with a rent holiday at a time when they need it most and can focus on putting food in their mouth. 

For the UK property the income originates from a Postman and Sales Manager at a Betting shop. While the former is unaffected at this time the latter is a concern but should be covered by the UK government 80% income replacement bailout for employed people. Quite the godsend really. Even still though nothing is taken for granted. Postmen can go on strike, gambling is susceptible to government legislation so a backup fund is necessary worst case with about 6 months of overheads covered per property. Again paid off mortgage-free property is optimal so that rent holiday's don't produce a painful grimace.

So as you can see from these two examples it's critical in more prosperous, non-recessional times to understand the income sources of your tenants or any other dividend producers for that matter and the subsequent effect of any black swan event. Though for the record it's more likely that 2008 would not have resulted in the same issue so YMMV rule applies as usual.

So in conclusion...

Diversification!! Not just dividends for life but Diversified Dividends for Life. Different industries that react differently, whether positive or negative to different world events. Life happens and it's the only way to give your income a fighting chance to sustain itself until the prosperous times return, which they will. Have faith as hard as that may seem right now.

Easy to say in hindsight but FIRE is not just about quitting the job in the good times, it's about understanding your portfolio inside and out to retain some sanity for the not so good times. Maintaining a frugal, scarcity mindset and holding sufficient cash reserves beyond all this to keep yourself upright for at least 2 years of pain. 

Easier said than done when you're burnt out and the job is unbearable.

Love to all,


Saturday, March 28, 2020

Fear, panic, lockdowns, calmness and rationality...

Interesting times in which we live is quite an understatement..

As I write this post both myself and Mrs DD4L are in lockdown in the OKC apartment, well sitting out on the sunny balcony listening to the birds tweeting away. We actually don't have a clue what the future holds and the retirement countdown I lead the blog with has a pin in it for now until we know more.

I could quit right now and go back to being FIRE but to be fair life would be no different since I'm in the exact same place I would be anyways, only difference being I wouldn't be opening the laptop at 5am to work on aircraft designs and would be on the hook for the monthly overheads of the apartment. The alternative would be to catch a flight back to the UK and risk catching Covid-19 at any point between here, ATL, London and wherever we wind up, assuming anywhere is open over there which it currently isn't. So here we stay for now and just keep a watch on the situation taking it day by day. Life could be a lot worse and is for some poor folks so count the blessings..

Not being a medical expert by any way shape or form the way I understand the virus and reasoning for it's subsequent fatality rate seems to be an aggressive lung inflammation when the body over-reacts to the virus and chokes off the oxygen supply requiring the use of a ventilator. The suggested resolution seemingly being malaria medication to reverse this inflammation, seems logical enough. It looks like the fear originates from our lack of ability to predict how our own particular body will react and how much inflammation we're likely to see in our personal case, this roll of the dice being the concern item. I would think that if you already carry pre-existing lung damage or scar tissue and are more prone to inflammation then the malaria medication would be the 100% lifesaver, though nothing is to be assumed here. Praying for everyone to be safe and healthy out there and a rethink on allowing bats and other intermediary carrier animals to be in proximity per SARS (Pangolins) and MERS (Camels)

Anyways back to business...

The other eye opener that became immediately obvious since my last post was the velocity with which my fellow investors sold their stock holdings. The immediate thought was did I miss something? Are we at the end of days? Is Will Smith wandering around like I am Legend? Also if we are in the apocalypse scenario then doesn't money mean nothing anymore anyways so not much point in selling out and hoarding cash.

But the selling...jeez. It was insane and worse than I've ever seen before. What happened to all that advice about hanging in there in the worst case? That all seemed to go out the window.

As far as the DD4L portfolio goes though we did hang tight from a stock perspective and were down about $150k at one point which would only matter if we were planning to ever sell. That said we did sell a lot of CD's, since interest rates took the elevator down to zero there wasn't much point anyways. With the proceeds we went to work continuing to build out the portfolio.

The way I rationalize these purchases from a karma perspective is that I don't view them as taking advantage of the Covid-19 scenario more taking advantage of the ridiculous over-reaction selling that has taken place as a result of it.

I also liken it to my childhood when my Dad used to take me around a car showroom and gaze longingly at the cars with the usual accompanying side hand to forehead look in the drivers side then a cursory glance at the price, a mutter of too expensive and then we move on. A lot of the stock additions to the portfolio have historically been like those expensive cars to me. Highest of quality and waaay out of my usual price range.

So with that said a lot of the following purchases I consider once in a lifetime buys that just don't come along every day, I couldn't believe the universe was giving me these opportunities.

So on Tuesday I dove in with buys in L3Harris (LHX) at $148 a share. That's right L3Harris!! I know right what the heck? Top quality here. On a roll I then added Honeywell (HON) at $112 a share on the Boeing and general airline weakness and overreaction. Raytheon (RTN) also got added at $113 per share, it honestly felt like Christmas.

Also loaded up on Norfolk Southern railroad (NSC) at $117.4 as well as Home Depot (HD) at $156.23 JPMorganChase (JPM) at $85.28 and continued with American Electric (AEP) at $66.18 and Wisconsin Energy (WEC) at $69.41 like I say mega quality on sale for a long term buy and holder..get it while you can.

Further down but still quality I rounded off completing positions in Old Republic (ORI) at $13.50 a share which you simply have to in these situations as well as Genuine Parts Company (GPC) at $50.55, Phillips66 (PSX) at $41.92, Discover Financial (DFS) at $26.57 and slowly wrapped up the Hasbro (HAS) position with a final surge at $43.06 a share.

Beyond all these the only one I missed that I wanted was Northrop Grumman (NOC) which never dropped to my $250 price, it dropped to the $270's which I'm now thinking whether I should be kicking myself for not just going for it. Save it for another time though, it's fine. No reason to be greedy when the portfolio got such an amazing boost.

In the words of BA Baracus I really do pity the fool who sold all these because I never will. Ever. In my lifetime no matter what happens. I want these handed down through the generations so take note DD4L Jr in the event I succumb to Covid or an equivalent myself.

High quality aside I also decided to take on some risk and go toilet fishing for stocks that were just insanely cheap because they had been crucified by the mortgage REIT pain from all the margin calls on non-agency. I think this is another overreaction area where investors aren't taking their time to understand what they own in the agency versus non agency Mortgage Backed Security market so are throwing the baby out with the bathwater. In this area I picked up 386 shares of Arbor Realty (ABR) at about $3.86 per share as well as 189 shares of Invesco Mortgage (IVR) at between $2.60 and 4.68 a share. IVR is not for the faint of heart here as they have been hit with a lot of margin calls they can never hope to meet (thanks ever so much RBC for being kind humans in a crisis) so will take time of forbearance to shake out. Like I say that last one is not for the faint of heart and could be flushed through the sewers.

Will be continuing to keep an eye on the bargain bucket in the coming weeks and months, happy shopping to all.

As far as dividends themselves go I've been very impressed by the logic and intelligence I've seen by the likes of Chatham Lodging (CLDT) and Cracker Barrel (CBRL) both these are in the hotel and restaurant businesses which have been hardest hit so yes, take a breather on the dividend and let's see how the land lies when we get back to normal life. I used to judge companies very harshly for suspending the dividend during a crisis until we got into one, now it just seem like common sense to me. Subject to it's resuming on the other side at the same rate I can deal no problem. Kudos to Jeffrey Fisher for using his god given common sense and the board for breathing in accordingly.

Can't blame Arbor Realty either for taking a similar approach and buying back $100M shares in the panic selling, you know if you don't want our shares we'll buy them back thanks.

Who knows how long this will go on for but I do know my opinion of some of the leadership teams of companies in the portfolio has really increased. You can't beat good old fashioned common sense logic,
just makes me want to buy more in support to be honest.

Stay safe and healthy,

Love to all,


Saturday, February 29, 2020

It's not the job it's the people...

60 days to go!! But hey who's counting?

I have a question..

When it comes to work life would you rather shovel excrement with some of the easiest going, nicest people in the world or turn up for a seemingly more enjoyable job but with some of the most negative, ego-centric, hardest to get along with people you've ever met in your entire existence? (Think high school but worse)

Reason I ask this question is not only is it very applicable to my situation (and maybe your own motivation for FIRE) but also for a time period was my main source of unhappiness and wishing this OM6 would end already.

That is until I decided to think about the situation and my extremely negative and ultra-hostile counterparts differently. Fact is it isn't necessary to go shovel pig poop (unless you so desire obviously) if you can identify the source of the problem is actually you and not them. (Huh? But aren't they just being bullying d*cks? How is that my problem DD4L? Ok I'm out.)

Hold on a second.

All I'm saying is you control your reactions and responses to these and any other people in this world no matter their background, personality type or in this case, out of control ego.

In the case of my counterparts they seemingly suffer from this basic superiority ego complex that carries with it a high level of insecurity. The need is to always be right, always prove you are better than everyone else as most of the US and UK population has been raised to believe. There is no time for being easy-going in this dog eat dog world with it's consumerist demands.

I can't help that though, those are the facts. All I can do is consider how I live in their world and how I choose to think about my responses.

Doesn't help that this is also a world where people live paycheck to paycheck and thereby in fear of being unemployed so it becomes even more of paramount importance to be better than one's counterparts or risk being first out the door in a RIF (Reduction In Force) situation.

Now obviously RIF's don't bother me or any other FI folks reading, neither does being unemployed since FI took care of all that long ago but I still need to be able to work around folks that aren't in this same advantageous predicament.

For the record my reasons for coming back and doing this job still exist. To be involved in an exciting, meaningful design project is still there alive and kicking. I also work for one of my best friends who so happens to be my boss and a wonderful human being, he comes over a few times a week and we chat about everything since he's also got FIRE aspirations and has a lot of wisdom. The problem is this brought about  a lot of jealous, insecurity issues in my surrounding compatriots.

My initial response to the hostility was to just go into full lock-down mode and keep my mouth closed, listen to Strauss and get on with my job. Good move right? Like Mum used to say, just ignore them and get on with it.


Unfortunately this only antagonized their ego's further because I wasn't feeding the negativity and that is really the biggest problem, when someone is wallowing in their own world of negativity and hostility they still have a need to feed that internal demon. They want to incite a negativity in you and cause an argument to get their fix and allow their negativity to build into a high.

The conversation went along the lines of:-

In a hostile voice "What's your deal? What are you doing here? You just sit there with your earbuds in and ignore us" (I removed the expletives for brevity)

This is one of those strange instances where your brain get's caught off guard and you don't quite believe what you're hearing, where the defensive response is to get pulled into a silly meaningless argument you don't want. You also wonder if people are still allowed to be this hostile in a modern working environment without being fired?

My response? In the most jovial voice I could muster when being cornered:-

"Well I just work here like you do, it's nothing personal. I have no animosity towards any of you I'm just busy"

These words are actually true, I tend to get lost in my work with classical music blaring away in my earlobes and I guess on the surface it does appear a little ignorant.

In that moment though I realized this was not the response he wanted, he wanted me to argue and when I diffused the situation by being non confrontational he had no further response, just stood there for a short time and then had to walk away. This was the first time I realized that killing them with kindness does actually work, I always thought it was psychologist mumbo-jumbo but you live and learn.

So do they still seemingly despise me and act hostile towards me? Yes of course they do because the emotions caused by ego and whatever painful life history is always being triggered and never go away unless you stop it yourself. You have to be willing to seek therapy to address those issues but I know my compatriots never will so it's a fruitless exercise to believe they will someday change.

My only awesome desk neighbor also insists I never leave because he believes that when I do the negativity will then be focused on him instead. Nice. But probably true though, in fact before I arrived he said that was exactly the case.

The point of this post is maybe it will help someone else who's on the FIRE path or dealing with an equally negative family member so is going through something similar, having their daily existence made a misery by hostile people. I still have days where I get depressed about the situation but have to quickly snap myself out of it and live every moment as enjoyably as I can. The trick seems to be to keep their negativity where it belongs, within them and not have it transfer to you. I know, not as easy as it sounds but believe me it does seem to work.

Love to all,