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Five Unusual Things I

Instead of sharing the usual things I’m thankful for (health, family, being Asian, etc.), I thought I’d share some unusual things I’m thankful for this year!

2023 was supposed to be a return to easy living. Alas, I don’t feel very relaxed. The combination of keeping Financial Samurai going and being a dad is grinding me down.

By going through a list of usual things to be thankful for, even if many of them are bad, I hope to feel more appreciative of everything. That’s what this time of the year is for!

I hope you will perform this personal exercise as well.

No matter how disappointing some things are, I always like to look on the bright side of things. So here goes nothing.

1) Thankful for local government corruption

When you have a $14+ billion annual San Francisco budget, it’s hard not to have some corrupt officials. Money and power can bring out the worst in people.

But let’s look at the bright side of city officials taking bribes. It means it’s hard to get things done due to high standards and tons of competition. If getting things done in the city were easy, we might be jeopardizing the health and safety of our denizens.

See: Former SF Public Works Director Gets Sentenced To 7 Years In Prison

Difficult to remodel or build new property

One example of legal bribery is paying a “permit expediter” to get your housing permit approved or approved faster. If you don’t pay for one, your permit could be held hostage for months or even years.

In 2005, when I was 28, I constructed a new full bathroom out of a closet. My general contractor advised me to pay $1,200 for a permit expeditor so I did. He told me, “That’s just how things work in the city.”

It sounded fishy at the time but as this was my first time remodeling, I didn’t know better. The permit expeditor I paid was charged with bribery a year later.

By making it difficult to remodel and build new homes, the city helps support existing home prices by artificially restricting supply. As a result, existing San Francisco homeowners have experienced greater home price appreciation than cities with less corrupt buildings and planning departments.

Further, if you can complete a gut remodel, your home should be much more valuable since it’s so hard to get permits and pass the rigorous inspection process.

See: Ex-SF Building Inspectors Took Bribes

2) Thankful to the Fed for creating boom-bust cycles

Instead of raising and cutting interest rates gradually, the Fed takes an aggressive approach, which creates boom-bust cycles.

During rate cuts in 2020 to counteract the pandemic, we made a lot of money in 2020 and 2021 with stocks and real estate. Once the Fed started hiking rates aggressively in 2022, we bought stocks at a discount. Now the S&P 500 is up ~20% and the NASDAQ is up ~45% YTD in 2023. What a blessing!

Thanks to aggressive rate hikes, I was also able to buy a wonderful property at a lower price 17 months after I first saw it in May 2022. The Fed’s rate hikes bought me 17 months of time to save, invest, and recover from my stock market losses. Without an aggressive Fed, the house would have gotten bid up beyond my family’s reach.

Thank you Fed for giving me the opportunity to best take care of my family! As a father, one of the top priorities is to provide a comfortable home.

Finally, thanks to the Fed, we can now all earn ~4.84% risk-free income for up to 20 years in Treasury bonds if we want. Earning such a high risk-free interest rate with inflation heading back to 2.5% or lower is a generational win. Millions more savers will experience greater financial security as a result.

3) The bright side of OpenAI changing to a for-profit company

OpenAI, the AI company which created ChatGPT began as a non-profit company to help all of humanity. But the leaders soon realized the money-making potential in ChatGPT, so they switched to a for-profit structure. After raising a tremendous amount of funding, hiring top talent, and innovating, the company is now worth ~$86 billion.

When a company is worth $86 billion, it gets to hire even more people, which is great for cities where OpenAI has offices (San Francisco, Seattle, etc.). In addition, the rapid creation of an $86 billion company increases the desire to create new competitors. Venture capitalists are funding AI companies left and right!

Anthropic, a close OpenAI competitor, for example, came out of nowhere and is now worth ~$30 billion. Not bad for an AI company which is also supposedly not profit driven.

Within several years, all this sudden wealth creation has created thousands of new millionaires and dozens of billionaires in the San Francisco Bay Area. Meanwhile, thousands of new jobs will be created.

If OpenAI had decided to remain a non-profit and loyal to its mission to help humanity, all this wealth creation likely would have never occurred.

AI Is A Vacuum Cleaner Of Capital

Now there is another strong local economic catalyst for the San Francisco real estate market and economy. I expect there to be even more AI companies created thanks to thousands of new financially independent employees at OpenAI, Anthropic, etc branching off. This happened several years after companies like Google and Facebook went public. Once the shares fully vest, employees like to do their own thing.

With a virtuous wealth cycle concentrated in the Bay Area, it’s now harder to leave San Francisco because more great fortunes will be made. The AI revolution is just getting started.

It’s much better to live at AI headquarters than be outside the walls where AI will be systematically eliminating millions of jobs over time. I hope this doesn’t happen, but it’s an inevitability when a company is trying to maximize profits.

4) Thankful for perpetual rejection

When I didn’t get promoted to Managing Director in 2011, after 10 years of loyal service to Credit Suisse, I decided to devise a plan to get laid off. The idea to negotiate a severance package with all my deferred cash and stock came to me while sitting at a bar in sunny Santorini, Greece. Then I made it happen six months later.

Being able to walk away from banking with money in my pocket was a dream come true. Banking was making me ill. Within a year after I left, all my chronic back pain, sciatica, and TMJ went away. The health benefits of early retirement are priceless.

Back then, I would have paid anything to feel healthy again. Little did I know that all it took for a healthy body was not working 60 hours a week for years under a lot of stress. Hooray for hitting the “bamboo ceiling”!

Turning job rejections into profits

After getting rejected by dozens of tech companies in 2012, I ended up buying a lot of tech stocks. I figured, if I couldn’t work for them, they would work for me! The returns from these tech investments have made it possible for my family to eat at McDonald’s every day for the rest of our lives.

Once my wife negotiated a severance in 2015 as a high performer, we no longer had subsidized healthcare. After getting one of our health insurance claims denied by UnitedHealthCare, I realized what a powerful business it was. So I bought some UNH stock and it has blown away the S&P 500!

Getting rejected as a writer

When no literary agent responded to me about my book idea on how to negotiate a severance, I decided to self-publish. The book has now sold thousands of copies and has made over $550,000 in net profits.

I consistently get comments and emails of thanks saying how How To Engineer Your Layoff gave them the courage to leave a bad work situation behind. It feels amazing to change people’s lives for the better.

Getting rejected as an athlete

One of the saddest things about being an athlete is getting old. At some point, you realize your body will no longer cooperate even if your mind is still strong.

In 2023, I was rejected by the captain of a public park 4.5-level tennis team to join his team. It was a sad fall from grace given I had played at the 5.0 level for four years on other teams before the pandemic. But without this rejection, I wouldn’t have experienced one of the most satisfying wins of my life.

On July 6, 2023, my partner and I beat the captain who had rejected me and his partner 4-6, 6-3, 10-7 in a critical playoff match. Ah, the win was so satisfying, so was seeing the melancholy on his face after he lost. Thanks Jeff for the priceless memory!

Related: Perpetual failure: the reason why I save so much

5) Lower-than-average desire to be successful

One of the greatest destroyers of happiness is never being satisfied with what you have. Because a friend of mine lost his life at age 15, since 13, I’ve felt more thankful to be alive. Every new year feels like a bonus.

At 34, I decided I had had enough and left banking. It was hard to walk away from a healthy paycheck. I knew if I worked for just five more years, I would be able to accumulate at least another $1 million in net worth. But I didn’t care anymore.

My passive investment income at the time wasn’t enough to live a rich lifestyle in San Francisco or Honolulu. But it was enough to live a comfortable middle-class lifestyle as an individual or couple.

If my intent was to make millions and get promoted to Managing Director, I would have been miserable for the next 5-10 years working long hours. My health would have suffered and maybe I would have cut a couple of years off my life expectancy.

Good enough is good enough I say!

Fame is not worth it

I’ve found mostly intrinsic motivation to do what I want to do. Although fame can be alluring, fame doesn’t sustain my interest. Attention is like an addiction that can ruin a person’s mental health.

I tasted some public exposure for a couple of months during my Buy This Not That book marketing tour in 2022. It was fun to show my parents the TV spots, but not something I would want to be ongoing.

When you’re with your kids at the playground, do you really want strangers coming up to you and interrupting your one-on-one time with your little ones? I don’t think so.

All I want is enough money to take care of my family, do meaningful work every week, and have the freedom of being a nobody.

So Many More Unusual Things I’m Thankful For

I could go on about more unusual things I’m thankful for. But I won’t bore you.

There are two main points to this post:

1) Try to look on the bright side of things. Bad things happen all the time. Train your mind to become more optimistic by looking for the potential positives. If you do, you’ll find more opportunities and feel happier as a result.

2) Don’t stop trying. You will never lose if you never give up. Don’t underestimate the power of grit. It doesn’t matter if you fail. What matters is that you tried and will keep on trying.

Happy Thanksgiving everyone!

I’m curious what are some unusual things you’re thankful for? What are some lucky breaks you’ve had?

Note: I’m not really thankful for corruption, boom-bust cycles, government red tape, and greed taking over AI. Rejections always stink as well. I’m just trying to look at the positives of suboptimal situations.

Solving The Happiness Conundrum In Five Moves Or Less

The Importance Of Forecasting Your Misery To Live A More Fulfilling Life

Thankful For Luck: A Phone Call That Changed My Life for The Better

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