Five-Minute Win
This week’s Five-Minute Win: Turn off one phone notification. (If you end up turning off ten, I certainly won’t object.)
A few years ago, I turned off notifications for email, social media, news, and just about everything else. I assumed I’d miss something important.
I didn’t.
The people who actually needed me still found a way to reach me. Everything else could wait until I chose to look at it.
That was the real surprise. I didn’t become less connected. I simply stopped letting my phone decide what deserved my attention.
One of the best investments I’ve ever made was buying back my attention.
Take five minutes today. Future You will thank you.
Which notification could disappear tomorrow without changing your life?
Every Rental Property Is a Business
Let’s say someone offers to sell you a rental property for $300,000.
If it rents for $3,000 a month, you’ve found what real estate investors call a 1% Rule property. That’s because the monthly rent equals roughly 1% of the purchase price.
At first glance, that sounds incredible. Collecting 1% every month means the property generates about 12% of its purchase price in annual rent. Of course, rent isn’t profit.
Property taxes, insurance, maintenance, vacancies, repairs, capital expenditures, and property management all take their share. One of BiggerPockets’ most useful rules of thumb is the 50% Rule, which suggests that roughly half of your gross rental income will eventually disappear into operating expenses.
That turns a 12% gross rental yield into something much closer to a 6% operating return before appreciation.
A 6% return. That’s what the business earns before appreciation.
One question I hear all the time is whether the 1% Rule is still relevant.
I think that’s the wrong question.
Rules of thumb don’t stop being useful because the market changes. They become useful because they help you understand how the market has changed.
If properties in your area rent for only 0.5% of their purchase price each month, the rule hasn’t stopped working. It’s telling you something important about the economics of buying rental property in that market. You’re looking at a business that’s producing something closer to a 3% operating return before appreciation.
Every investment has a return. Rental properties also have a hassle factor. Only you can decide whether the return justifies the hassle.
I’ve found that the numbers usually tell the truth long before the sales pitch does.
The math simply doesn’t care where you live. And it doesn’t change just because you don’t like the answer.
My Daughter Called Me Out
I took my daughters to the gym recently and was explaining the training philosophy I’ve learned from my trainer, Dean Turner. As we walked around, I found myself pointing out all the things I thought people were doing wrong.
“See how he’s swinging the weight?”
“She’s using momentum instead of controlling the movement.”
My intention was good. I was trying to explain why proper form matters and why I’ve come to appreciate slower, more controlled lifting.
My older daughter stopped me.
She said, “You don’t have to keep pointing out what everyone else is doing wrong to explain what it should look like. Just show me what it should look like.”
That one stung a little because she was right.
I’ve thought about that conversation many times since because I got it wrong. And I suspect I’ve done this before.
It’s surprisingly easy to teach by criticizing. It takes much more effort to teach by pointing to examples worth emulating.
The more I think about it, the more I see that idea everywhere. The best coaches spend more time demonstrating good technique than complaining about bad technique. The best leaders model the behavior they want to see. The best parents spend more time reinforcing what’s working than criticizing what isn’t.
I’m trying to get better at that, and I’m grateful my daughter cared enough to point it out.
Sometimes the best lesson in the room isn’t the one you’re teaching. It’s the one you’re willing to learn.
A Few Things…
A few things I found interesting this week…
🏓 Pickleball
I finally got back on a pickleball court recently with Erin and our friend Nicole from the ChooseFI Richmond group. I hadn’t played in a couple of years and forgot how much fun it is. It’s one of those rare activities that’s equal parts exercise, competition, and conversation. I have a feeling we’ll be playing a lot more.
🐟 Sardines
I’m back on the sardine train. They aren’t exactly glamorous, but they’re one of the highest-protein, most nutrient-dense foods I know of, and they’re packed with omega-3 fatty acids. I’m trying to make it easier to eat foods that are almost boringly healthy.
🧘 Relaxation Upgrade
I’ve started combining a 10-minute Yoga Nidra session with an acupressure mat, and I absolutely love it. I’m not sure whether it’s the Yoga Nidra, the acupressure mat, or simply forcing myself to slow down for ten minutes, but I finish feeling noticeably more relaxed every time.
💰 HSA
I maxed out my HSA this week. There’s something deeply satisfying about maxing the HSA because it’s such a powerful investment account. I suspect a lot of people still assume HSAs are only available through an employer, but my understanding is that all Bronze ACA marketplace plans now qualify too. If you’ve never looked into it, it might be worth five minutes to confirm if your plan is eligible.
🛒 Unexpected Travel Rewards Win
My free Instacart+ membership was about to expire, so I logged in expecting to cancel it. Instead, I discovered a $20 discount on the annual membership because I have a particular Chase business card. While I was there, I realized Instacart+ includes Peacock Premium (which I was already paying $10.99/month for), and another Chase card gives me a $10 monthly Instacart credit. I went from planning to cancel to happily paying $79.99 for the year. It’s a good reminder that it’s worth checking the benefits on the cards you already have—they change more often than most people realize.
Around ChooseFI
A few things happening around the ChooseFI community…
🎉 Community Wins
One of the most-loved parts of the newsletter is the Taking Action section, and it only exists because you share your wins. If you’ve made progress, I’d love to celebrate it. Hit reply to this email and send in your win or visit our Feedback page, click “Share a Win,” and then “1% Better.”
📍 Local Groups
If you haven’t already, take 30 seconds to join your local ChooseFI group. You’ll automatically receive email notifications about meetups and events in your area, making it easy to connect with other people on the path to FI.
🎙️ Continue the Conversation
Have thoughts or questions about this week’s podcast? I’d love to hear them. Join the discussion on Episode 607, where Diania Merriam and I had a wide-ranging conversation on too many topics to list here. This was one of my favorites!
📚 Book Club
Our next book is Happy Money: The Japanese Art of Making Peace with Your Money by Ken Honda. Ginger will be discussing it with Jillian Johnsrud next month, so now’s a great time to grab a copy from your library. I’ll share details on how to submit questions and join the conversation in an upcoming newsletter.
✈️ Travel Rewards
My Top Ten Recommended Travel Rewards Cards page is always up to date, including current welcome offers. If you’re thinking about your next travel rewards card, that’s the first place I’d look. Right now, my #1 recommended card has a 100k welcome bonus, making this one of the best times we’ve ever seen to get started.
If you apply using our links, ChooseFI earns a commission at no additional cost to you. That support helps keep the podcast and newsletter free, and we’re incredibly grateful.