Know Your Blogger Series

Sport of Money

I started my blog in earnest back on January 1, 2019. I originally made an attempt back in 2016 to start a blog. Unfortunately, I couldn’t keep up with the writing schedule. I published a few posts and then stopped writing for it. But now I am back with a focus of producing high quality content in the personal finance space.
I believe anyone can be wealthy. They might just not know it yet. The mission of the blog is to provide knowledge and guidance to help everyone achieve a healthier financial life.
Check out our Q&A with Sport of Money here.

See how to achieve a healthier financial life at the blog Sport of Money.

Each week at Personal Finance Blogs, we publish interviews from amazing bloggers from the personal finance space. This week, we are featuring the blog, Sport of Money.
During these weekly features, we are hoping to provide a way for you to interact and learn more about different blogs in the personal finance space.
Below, you can read more about the story behind Sport of Money, learn about the author, and learn personal finance tips from Sport of Money to help you improve your financial situation.
A big thanks for Sport of Money for this interview! Now, we will turn it over to the author for this interview.

Tell us about Sport of Money

Many Americans spend countless hours on their physique by watching what they eat and working out at the gym. They hope to achieve a healthier body. There are also many people who spend time practicing yoga and meditation to have a healthier mind. I don’t think Americans in general spend enough time working on their financial life.

I believe anyone can be wealthy. They might just not know it yet. The mission of the blog is to provide knowledge and guidance to help everyone achieve a healthier financial life.

What makes you and your blog unique?

My own personal experience makes the blog unique.

I grew up in a financially poor household in New York City. My parents worked blue collar jobs just to make ends meet. They worked really hard to provide for me and my siblings.

While we didn’t have money growing up, I had a happy and healthy childhood. This taught me that when it comes to happiness, money is not the end all be all. But I have observed and experienced how hard life can be without money. Ironically, growing up poor actually provided me with benefits which helped me do better later on in life.

I knew early on that I want a better financial life for myself. Through a decade and a half of hard work, dedication, focus, and sacrifices, I hit the 8 figure net worth marker.

I have a passion for personal finance, work in the financial services industry, and know what it is like being poor to accumulating over $10 million in less than 2 decades. This blog captures my mindset, thought process, lessons learned and reflection of my financial journal.

What does “being good with your personal finances” mean to you?

“Being good with your personal finances” means to me that you have control over your personal finances. There are a few things one must have in order to have control:

Fundamental knowledge of key concepts in personal finance – you need to know the basics such as compounding, interest, bonds, stocks, financing options, budgets, assets, liabilities, income, expenses, etc.
Understand your own financial situation – how do you spend money? how much assets do you have? What is your debt load and how much interest are you paying on the debt?
Create a financial plan – where do you want to be net worth wise 5 years from now? How do you increase your income by 2 folds in 3 years? Use a budget to keep track of your expenses.
Monitor and track how you are progressing – are you doing as well as your plan? What are things you can do better?
Reward yourself on achieving financial goals – go splurge on an item or experience for hitting your financial target. Getting rewarded keeps the motivation up and provides excitement to continue along your financial path.

What are some habits you practice to keep your personal finances in order?

I used to maintain a budget religiously to see how much my family and I were spending and how much we were saving. After being in a range for a few years, we are basically dialed in to what our household expenses are. I stopped maintaining an expense budget. But I still keep track of household assets and liabilities to monitor our net worth. I can see if we are growing the net worth at the clip I would like.

I don’t impulse buy. For any major purchases of significant dollar amounts, I plan ahead in order to save up enough money to make the purchases. I think about the cost of the purchase and the timing of when I want to make the purchase. Then I can see how much I need to save each pay period.

Also, don’t panic sell when the equity market takes a dive. If you believe you still want equity exposure in the long run, hold onto your stocks and ride the downturn out. The goal is to buy low and sell high. Don’t do the reverse and sell low in a market downturn.

What are your three articles people should read to get to know you and your message better on your site?

Path To Financial Success

7 Secrets From Two 401(k) Millionaires To Turbocharge Your 401 (k)

Wealthy? Practice Stealth Wealth For Greater Peace Of Mind

For someone looking to improve their financial situation, what’s your best advice?

Personal finance is personal as the name implies. Everyone is in a different situation.

But if I have to provide some feedback to a broad audience, I think in the short-term – do two things:

Put together a budget and start to track your expenses. Monitor your expenses to get a good handle over your expense items.
Take a look at all your debt. Arrange them from the highest interest rate to lowest. Try to deal with the most expensive debt first. Try to consolidate and refinance to a lower rate when possible. Mortgage rate is a great example. It is so low right now. If you obtained your mortgage more than 2 years ago, you should really shop around for a new mortgage.

Middle-term: Once you have a good handle of your expenses, look to see what you can cut out. Start with a 10% decrease and try it for 2 months. If that works well, then decrease it by another 10% every two months until you find it too challenging. Now you know the limit of where you can be in spending and keep at that level.

Long-term: Increase your revenue by creating multiple revenue streams. Start an online business or build a portfolio of rental properties. Do not rely on one cash flow stream for your livelihood. Make sure to have at least three substantial ones to diversify cash flow source.

In your opinion, what’s better? Renting a place or buying a house to live?

I am a big fan of real estate and believe real estate should be a cornerstone of anyone’s investment portfolio.

Owning a house is a great wealth generator for many Americans. Because of this, I believe owning a house is the better route for most assuming a time of 7 years or longer.

The key here is not to buy too big of a house. At some point, the house can turn into a big negative if you overspend.

The average new American house has gotten a lot bigger over the past 100 years (over 1,000 square feet bigger) and the personal space has increased over 200%. Based on Zillow, the average personal space is over 900 square feet.

I would suggest capping your house to 600 square feet per person. That means for a family of 3, buy a 1,800 square foot house at most instead of the average size of 2,400 square feet.

This can save you money on the purchase price, maintenance, insurance, real estate tax, and utility costs.

What should you do first? Pay down debt, or invest?

The answer to this question really depends on a few factors. The first factor is the cost of your debt versus the return on your investment.

If I can get a 10% return on my investment with very little risk and I pay only 2% on my debt, then I say lever up. You are clipping an 8% spread on the money borrowed. I would try to borrow as much as possible to invest.

The other factor is risk. In order to obtain the return on investment, how much risk are you bearing? If you believe you are well compensated for the risk, then focus on investing.

For instance, I am a big fan of borrowing as much money as possible to buy real estate investments because of the current low interest rate environment.

What’s better? Focusing on increasing your income, or focusing on decreasing your expenses?

Once again, this isn’t a black and white question.

There is no limit to how much your income can increase but there is a limit to how much your expenses can decrease. That means if you want to be worth $10,000,000 in 10 years, you will never get there by decreasing your expenses from $70,000 to zero. You need to do it on the income side.

But increasing income is the harder route for most people than to decrease expenses. We can all cut down on our expenses. Housing cost is usually the number 1 expense for most Americans. I can just move into a smaller space or into a lower cost neighborhood to save on my housing expense. That’s doable for anyone.

But to create another income stream requires a lot more effort.

If you received a $5,000,000 windfall tomorrow, what would you do with the money?

I already talked about my propensity for real estate. If I receive a $5,000,000 windfall tomorrow, I would use the money to buy a residential building.

I would shoot to buy a $15,000,000 building by borrowing $10,000,000 from a lender given the low cost of financing in today’s low interest rate environment.

I hope to get at least 8% cash on cash return on my investment which amounts to $400,000 a year. With the tax benefits of real estate investment such as depreciation, I might not have to pay any income taxes.

Imagine getting an after-tax amount of $400,000 cash a year from that investment. It can surely pay for a very comfortable life.

Why do you believe learning about money and caring about personal finance is important?

Personal finance is important because it impacts all aspects of your life. One of the most common reasons for divorce is money issues. Think about the impact to a household when a couple gets a divorce. Not only does it impact the financial wellbeing of the couple involved, but divorce can exact a physical and mental toll. What if there are kids involved as well?

Even outside of divorce, constant worries about money can lead to mental stress and physical fatigue. Lack of money can also negatively impact health coverage. Money can also provide for more opportunities for your kids.

I also believe money is an accelerator for personal growth. How does one grow as a person of this world? By traveling the world and experiencing the different cultures, customs, and food. It is hard to travel without money. What about advancing in a hobby? Money is needed for that.

Don’t look at money as the root of evil. Look at money as a needed ingredient for personal growth.

How You Can Contact Sport of Money for More Information

You can learn more about Sport of Money at http://www.sportofmoney.com/.

Thank you for reading this interview, and thank you, Sport of Money, for providing us with some great personal finance tips!