Sunday, January 31, 2016

Book Review: The Automatic Millionaire Homeowner

Do not waste money on this book.  If you are curious about this book, just go to your local library to borrow it.  After all, you pay a lot of property taxes as a home owner, or you pay a lot of rent for your landlord to pay the property taxes to support the local libraries which cost millions a year to run. So make use of your library whether you are renters or homeowners, but do your wallet a favor and do not spend a dime on this book.  Even if this book is free, it's not worth the expensive real estate to store.  Just think of how many US$ does it cost you  to purchase or rent one square foot of space??

What this book is selling is a dream in a utopia where you can always get the bank to loan you $160,000 to buy a $200,000 home and you only pay $40,000.  Then this book assumes that you can always turn around and sell the house for $220,000, assuming your house is always going to increase in value by 10% immediately.  Do you now see how misleading this book is?  This book totally assumes that you can't invest your $40,000 in other investments to make money but in real estate only. How absurd is this? So if you have $40,000, you just have to buy a house in order to be rich?  How about investing in yourself, or investing in stocks, or a business?  Yeah, selling a home of $220K with only $40,000 down and you will "easily" get $20K for profit immediately?  Seriously?  How about the thousands of dollars you pay for inspections, title clearance, escrow fees and document fees at the time when you make a purchase?  How about the 6% broker's commission you have to pay when your house sells?  How about repairs?  How about the interest expense on the $160K loan?  And how about property taxes for the time you are holding title of the house until it is sold?  How about home insurance, maintenance fees?  How about the  investment returns in a mutual fund, a stock or a business that you can potentially have but you gave up having because you spent your $40K on buying a house that is literally the food for termites? How about the time you spent in searching properties to buy and getting bank financing, when you can use that time for leisure, a second job or a business that makes money? Or cook more to save money?   Now when you consider all these costs, the profit of buying a house with other people's money and sell it at $220 immediately without having to wait  one day,  doesn't seem to be as profitable. (The situation where you can sell your house the same day you buy it almost never happened because a house is not liquid like a stock where you can buy in the morning and sell in the afternoon. If you want that, why not borrow from the bank to buy stocks then? Or use your interest free deals from your credit cards to just speculate the stock market for one year!!!)

This book was first written in 2005, and you already saw  what happened to a lot of home owners since then!! Broke!!!  Real estate isn't the only way to use other people's money to invest.  It's however the least liquid investment that you can invest with other people's money, compared to day trading stocks using your 18 months 0% APR credit card offers. 

Real estate is no less risky than any investment, and it's no more profitable than any investment.  It takes luck, brains, hard work and meticulous calculations to make money in anything.  If only it's so easy to be a millionaire just by being a homeowner, then there will be a lot more millionaires, but the truth is there are more homeowners who are house poor than house rich. 

Saturday, January 9, 2016

Book Review: Dearie

This is a remarkably detailed biography on the life of Juila Child.  I had learnt an awful lot about the long and legendary life of Julia Child from this book.  Julia Child didn't take an interest in cooking until after she got married in her 30s.  It's really inspiring for all of us to learn from the life of Julia Child that, sometimes it's okay to not know what we really want, and it's okay to take a little detour to discover who we really are.  Many of us know very well what Juila Child was famous for, yet many of us know very little about the war that Julia Child served, and her thrilling plane ride above  the sky of Chongqing in war torn China back in the 40s.  How many of us know that before Julia Child took an interest in French cooking, it was Chinese food in Chongqing that woke up Julia's Child's palate? Do many people know that Julia Child and Paul had a serious car accident the day before their wedding, on her way to her rehearsal dinner? She was ejected out of the car.  What a survivor!!!  Having a broken arm and numerous stitches on her forehead didn't make her cancel her rehearsal dinner and wedding plan!   It may look to the world that Julia Child had her success very easy.  But little do people know that it took her many years of hard work and dedication to evolve to the celebrity TV cook she had become.  Then what life doesn't have tragedy, heart break, crisis and trauma?  This book has lots of remarkable details on the ups and downs of Julia Child's life, and the book takes the readers to experience a lot of emotions, happiness, pains and sadness behind that cheerful face of America's TV icon.  Julia Child is no doubt a very strong woman, and a fighter, and this book tells it all.  This book is a great read and it tells me not only the detailed biography of Julia Child, but it gives me a very valuable history lesson, regarding the bygone eras which Julia Child grew up and rose up to become America's icon.