Regular readers of this blog will notice that today’s post is a day late.
No, the intention was not to turn it into Valentine’s day present (though I am sure it’s a nice touch).
The real explanation is far more prosaic – I’ve spent the better part of the week trying to negotiate our next real estate purchase.
To make a long story short, it didn’t work out.
We loved the property (a renovated three-bedroom house in a fantastic location) and were willing to bid a slight premium to the “fair” market price.
As a result, we put a highly compelling offer in. The only catch? Our offer was contingent on securing financing. Not something I worry about.
Still, this isn’t our primary residence we are talking about here. And I’ve been around long enough to know that banks’ appetites to finance rental properties can change on a whim.
The sellers, emboldened by the bull market, have asked us to drop the condition. We refused.
They shopped our offer to the next highest bidder, who promptly increased their offer to just $15k south of ours. The deal got done away.
When my agent called me up at 2 am with the news (courtesy of the time difference), I was more than a little miffed. You don’t read about this kind of stuff when people wax lyrical about real estate investing.
Yes, sometimes you win. And sometimes you don’t.
But whatever happens, the old adage holds true: the first rule of making money is not losing money.
On to the next one.
And in the meantime, happy Sunday!
From Yours Truly
Building Wealth
Twenty Cognitive Biases Costing You Money by Wallet Hacks
You Can’t Control The Outcome, You Can Only Control The Process by The Escape Artist
Should You Own Bitcoin In Your Portfolio by Monevator
Crowdfunding: Why The Returns Suck by FIREvLondon
What London’s Falling Population Means For The Housing Market by the FT
Also from the FT, this gives you an idea of who really benefits from the retail trading mania: High-Speed Traders Reap Windfall From The Retail Investing Boom
Dreaming of startup riches? As someone who has given entrepreneurship a go, I have first-hand experience of just how challenging it can be to run a business.
In addition, I’ve had multiple friends who joined startups over the years. Suffice it to say that the vast majority of those stories turned out in a way that wouldn’t merit a newspaper article (barring a negative one).
If you are still tempted by the idea, the Financial Samurai explains why you shouldn’t join a startup if you want to get rich.
Early Retirement
The Covid Pandemic As Preview Of Retirement by the Humble Dollar
The Best Way To Manage Sequence Of Returns Risk by A Wealth Of Common Sense
Fighting The Financial Independence Demons by Monevator (that’s right, it’s a double feature!)
Retirement Myths of The Social Media Era by Incognito Money Scribe
Lifestyle Design
Yes, Money Does Boost Happiness by the Humble Dollar
How To Be More Productive At Work and Manage Time Effectively from the WSJ (and Khe Hy, one of my favourite bloggers)
And if you have a bad habit you’d like to kick, you might enjoy this story of how to beat a 27-year Diet Coke addiction
All Around
Is Big Tech About To Get Taxed? on Sky News. This would certainly be music to my ears.
Love him or hate him, but you should read at least one article about him: The King Of SPACs Wants You To Know He Is The Next Warren Buffett
New Blogger Highlights
Nope, there’s nothing in this section – for now.
However, if you are a personal finance blogger who hasn’t yet been featured on Greatest Hits, I would like to hear from you.
Please send an email to bankeronfire at gmail dot com with a blog post you would like to submit for consideration.
The key criteria for inclusion are as follows:
(i) Content that will be interesting or beneficial to the readers of this blog (I hope you will forgive me for reserving judgment on this one)
(ii) Your blog must be at least 6 months old, with regular posts. Too many bloggers flame out early, and I don’t want the readers here to follow a bunch of dead links.
I look forward to hearing from you!
Recommended Reading
Want even more? Below are this week’s recommended books:
Nudge: Improving Decisions About Health, Wealth, And Happiness by Robert Thaler
Influence: The Psychology of Persuasion by Robert Cialdini (this one is straight from Buffett’s reading list)
Get Smarter: Life And Business Lessons by Seymour Schulich. Written by a Canadian self-made billionaire philanthropist, this book packs a real punch when it comes to life and career advice
Have a great weekend!
Note: the above post may contain affiliate links. You can read up about our affiliate policy here.
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Banker On FIRE is an M&A (mergers and acquisitions) investment banker. I am passionate about capital markets, behavioural economics, financial independence, and living the best life possible.
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Gutted to hear about the property. As you say, onto the next one! Investing is a marathon and not a sprint to the finish line.
In the market where I’m from it is quite common to get pre-approved financing (unlike the UK where you can only get an approval in principle) where you can drop the financing clause at your discretion and just take valuation risk ie. the registered valuation potentially coming a bit shy of the banks view and having LTV locked in. Guessing this does not apply in the US?
Yes, you can get a pre-approval if the property is going to be your primary residence.
But for rental properties, the bank wants to have a final say once they’ve seen the appraisal and the numbers. At the same time, I am not about to risk losing my deposit in case I can’t line up a mortgage.
It’s a handicap for sure, and I’m working with my bank to resolve it so hopefully, I can be on even footing going forward.