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Thursday, March 31

Selling the BNB, What I'm Reading, Increasing Passive Income

2022 has been an incredible year so far.  I'm writing this blog from the Gaylord Rockies outside of Denver, where I just wrapped another meeting job.  This is #2 of 4 back-to-back meeting jobs I'm doing.  Things don't appear to be slowing down.  I love to travel, and it's great being able to make money while honing new skills.

One minor downside to all the work I am doing is that it's easy to let everything else overwhelm me.  This is just another reminder about why it's important to simplify my life.

Selling the BNB

This one was difficult.  As I quickly approach four years as an Airbnb host, I've decided to take advantage of the hot real estate market and sell the house.  I was contacted by an agent in March who was engaging and full of energy.  I usually ignore unsolicited offers from realtors, but this guy got my attention.  He had neighborhood comps that suggested my home would sell for healthy price.

I've been thinking about selling for several months.  When I was planning my 2022 goals, selling one of my rental properties was Goal #1.  I had a different property in mind - and am still strongly considering selling it.  So there is definitely a possibility of selling two houses this year.  The plan for the BNB is to list it in early May.

The Intelligent Investor

I'm talking about the book by the father of value investing, Benjamin Graham.  I aspire to make intelligent decisions about my investments, so I redeemed a Barnes & Noble gift card I was given for Christmas to buy this book.  Graham was Warren Buffett's teacher (literally), and this is considered the Bible of Value Investing.  If I am successful at selling the BNB I'm going to have a windfall of cash to deploy.  There's so much noise in the stock market these days.  A lot of what's happening is irrational, and markets eventually become rational, every time.  I hope that The Intelligent Investor will make me a more successful investor.

Increasing Passive Income

I've been actively working to increase passive income for years, but have put this into high gear these last few months.  I've purchased a number of bonds, most of them at distressed prices.  One of my favorite investments right now is a bond issued by the theater chain AMC.  It matures in 2025 and is the next substantial debt to come due for the company.  The meme-gamblers are responsible for a lot of the noise in the markets today.  These kids aren't buying based on fundamentals but instead on the greater fool theory that someone else will be willing to pay more than they did for a stock.  Why does this matter?  AMC took advantage of this noise by raising a ton of cash last year by selling overpriced shares of stock.  This gave the company a substantial war chest.  I think the odds are good that the company will honor its debt obligations, at least for the next few years.  I've bought a substantial amount of AMC bonds for less than 80 cents on the dollar.  If all goes as expected, I'm getting a 15%+ annualized return.

AMC is just one example of where I am growing my passive recurring income.  I've bought other bonds at similarly attractive prices.  I've also been investing in income properties on Realty Mogul.  Eventually I will set an annual income goal with the intent to earn enough passive income to pay all my bills.

The most important benefit to all this will be more freedom to do things I enjoy.  Owning an Airbnb has been one of the best financial decisions I have made.  But along with these golden handcuffs comes a lot of responsibility.  We have to plan our lives around the house.  I've tried multiple housekeepers, and am not satisfied with their attention to detail.  I would LOVE to be able to take a vacation and not have to think about some issue arising at the house that will require my attention.  Sure, I could put more effort into making this a truly passive source of income by hiring a management company.  But home prices are so high that, with a bit of effort, I think I can earn close to the same amount of income in a totally passive way via Realty Mogul or stock investing.

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