I live a little bit in the ghetto. It doesn't feel dangerous, I like my neighbors, and the location is perfect, but in Las Vegas this is known as a terrible area. Even after being pleasantly surprised at how nice it was when I saw the place (I bought it sight unseen), I was worried that I'd find out horrible things about the area after living here. But I've been here for a year and it's been smooth sailing.
I'm in the middle of a big bathroom renovation. So far, other than some plumbing for the tub, I've done all of the work myself. But I have a lot of tiling ahead of me, so I called a tiling guy and asked him for a quote. Part of the conversation went like this:
"And where do you live?"
"[ cross streets]"
"Oh. Wait, I know that area. Really, those cross streets?"
"And you're putting money into a place over there? Seriously?"
I love that he just couldn't contain himself, so ghetto is my neighborhood. And maybe by conventional wisdom I am making a mistake. I can't imagine that the dollars I'm putting into my place will pay off in kind if I ever sell it.
But I don't care, which is the whole point. Conventional wisdom is so limiting. Why can't I make my tiny little apartment in the ghetto into my own personal paradise? It has everything I need and the location is way better than where everyone else lives in Las Vegas. I think it's liberating to just do whatever you want.
Everyone else is thinking along conforming lines. It IS unusual to put this much time, effort, and money into such a cheap condo. But the mistake everyone makes is assuming that it's bad because it's unusual.
The way I'm thinking is that I got a $200k condo for $40k. Relative to that number I'm spending a low amount renovating this place. The fact that I actually paid $40k is irrelevant, because it's worth a lot more to me personally. I'm also thinking about AirBnb. If I show pictures of a place with beautiful black marble floors, I can rent it for way more. It will look like the fancy suites that people want in Las Vegas. Even if I can't increase resale value, I bet I can put more money in my pocket in the long run.
Don't be scared when what you're doing is contrary to everyone else. If you're doing it just to be contrarian you might be making a mistake, but if your own logic dictates that it's the right move, I bet it is. One-size-fits-all thinking only goes so far.
Photo is my bathroom in its current state. No toilet or sink and I have to sit to take showers because the walls aren't waterproof yet. Right after I post this I'm going to build an apron for the tub and start prepping the floors.
Watch it, mister. That kind of thinking is what makes people see possibilities and turns bad areas around. And we can't possibly have that.
Go for it. It's not what other people think or approve of that works for me. One man's junk is another man's treasure.
I've owned a few houses in my lifetime; most of which I sold for a moderate to decent return on my investment. We leveraged the last two houses into enough cash to buy our current home, outright (with quite a bit of leftover cash). We bought an 1100 square foot 1947 home in a mid-sized Minnesota town with an easily-maintained, very private 3/4 acre of land for what would have been a down payment on a similar property in the Twin Cities. This is the house we intend to spend the rest of our lives in, so we can do what we want with it. We've always considered resale value with our remodeling in the past, but not with this place. Our kids will have to worry about that when they sell off our estate, but we're doing this place up to optimize the way we want to live. It's liberating.
Tynan, this is amazing. Not only does your Vegas condo purchase seem like a great idea financially and lifestyle-wise, but the fact that you just DID it is an accomplishment and reward in itself.
This prompts me to want to ask you a question. I'm curious what your analysis and instincts tell you about potential other interesting cities for people to do this in. Not just cheap places, but good ones in other ways (like the cheap flights to/from everywhere in the country in the Vegas situation).
Off the top of your head, are there places that you think are interesting? Obviously there are lots of considerations (like cost, major airport proximity, people, liveability, etc.) and it varies based on the person, but I am just interested in your take because of how you think, how you live, and the fact that you can make decisions fast!
I wonder about places like Florida.
Most of my friends and job prospects are in the most expensive cities (SF, NYC, DC, BOS, LA), which complicates matters. In addition to cities to buy in, I also wonder about hacks to live in expensive places. Like living in a small apartment in an area full of homeowners.
Anyway, you've lived in Austin, in San Francisco, in Vegas, in a house, an RV, a condo. You've lived as a nomad, you've discovered the amazing bargains in cruises, etc. You have a unique perspective. What do you think are some cool places people could consider if they are inspired by your Vegas move?
I have thought about what other place I would like to live other than Richmond, Virginia. I love living in Richmond. Why?
1. Affordable housing
2. Richmond is 1.5 hours from the ocean, 1.5 hours from the mountains, 1.5 hours from D.C.
3. We don't get horrible weather. We have the 4 seasons. We may get 1 hurricane every 10-15 years that does some damage. Otherwise, we don't experience catastrophic weather.
4. Plenty to do and plenty of opportunities for businesses
5. I love our summer tomatoes, cucumbers, squash, etc. I love Chesapeake Bay hard crabs.
The thing about investing money is that it's pretty hard for an individual to do much better than 5-15% per year consistently, depending on your risk tolerance and connections (my best investments have been putting money to work with friends' businesses). Five to fifteen percent is pretty good, but it's inside-the-box thinking to stop there. What else can we do with our money?
As a disclaimer, I have a good portion of my money in investments that make a return like that. It's good to grow your cash and I'm not saying you shouldn't. But what if you diversify your portfolio beyond earning a financial return?
After all, the point of money is utility, so why aren't we thinking one step further and thinking about how we can earn the most utility on money?
I love to find situations where my capital is preserved, grows a little, or is consumed very slowly, but which yields me a lot of utility as a result. For example, I bought my RV for $18k, plus probably $15k over its life in repairs, and maybe another $6k in improvements. I sold it last week for $30k, so I lost $9k over the eight years I owned it.
Yesterday, at 5:35 am, I finished my fourth book of 2014. It was Robert Greene's 'The 48 laws of power'. In this blogpost, I will explain why I push myself to read, why it's so important to me, and why I'm (sort of) glad that most people don't read.
Over the past couple of years, self-development has become really important to me. I realised at one point that if I don't work on improving myself in skills, physique, intelligence, personality and way of thinking, I would end up with a really shitty life. So I started reading books in order to grow. What makes books so important? I'm a very practical person. I'm hands-on and more comfortable with doing things than talking or thinking about them. Books help me improve my weak side, the theoretical side of life, the abstract. (i.e. marketing, PR, social psychology, story telling, politics, boedhism,...) I exercise both my art skills and my physique, but I need brains in order to put that into good use. And the brain can be trained by reading and studying books.
Books give me a better sense of my lifes purpose. I can build or improve my own character and insights from the insights and stories from various books. For example, Seneca's 'Letters from a Stoic' has had a profound impact on the way I look at wealth, audience and morals. Here's one of his quotes:
'“A cheerful poverty is an honourable state” - Epicurus.- But if it is cheerful it is not poverty at all. It is not the man who has too little who is poor, but the one who hankers after more.'- Seneca