Welcome to my income report for October 2021

In October, I have earned $1289 passively in total. More than in the previous month due to selling my DJ controller.

What I Did In October

First Troubles With Tenants

Renting real estate is a tough, stressful, and money-losing biz. Especially in Europe, where the yield front the rent won't compensate for the headache and potential troubles. The only reason why anyone in their clear mind would invest in real estate in Europe is because:

it is a bet on asset appreciation
has easy access to cheap leverage
there is a low ownership taxation
of having a roof over the head after retirement
there is no other asset with a better risk to reward ratio for the available cash invested

For me, it was a combination of the above. But mainly it should serve as a safety net helping me from being homeless one day.

In the meantime, it would be nice if it would cash flow itself with minimal effort. However, that would be ideal and realistic if you had freshly rehabbed, at least a two-bedroom apartment in the city center on the top floor near the recreational park.

If your place misses any of the requirements above, you have to compensate by lowering the rent or accepting riskier tenants.

I chose the second option because of the supply and demand and covid situation.

And now I have to deal with the consequences.

Not long after signing a rental contract, I got a call from my neighbor who lives across the hall. She somehow got my number and called me out of blue.

Her voice was desperate and fearful as if she went through some kind of tragedy. I felt the fear on the other side of the phone, while she was describing, according to her words, the situation that is out of this world.

One night, a van with 8 people plus arrived in front of the building.

No, those were not blue-collar workers, but visitors and probably my tenant's family members. Who knows.

Everything was fine until she heard screaming and arguing. Now, a lot of details were lost in translation as she was not able to describe what happened minute by minute. But something terrible happened in my apartment and she had to call the police to make an order.

Allegedly there was blood on the floor and people were leaving the apartment through windows. Nothing but madness and chaos she said.

Of course, not wanting to alienate my neighbors I soothe her concerns and promise her to send management company for inspection.

I was afraid, that they trashed my apartment, that they broke windows and amenities. For a while, I was so nervous I could not get any sleep. I even planned to walk there myself and stalk my tenants from outside.

But fortunately, the inspection came clean stating there were no obvious damages on the property.

Not surprisingly, my tenant denied all accusations that anything happened at all.

Now I pray every day to the real estate god for keeping my property intact and cash flowing.

Seriously, If you want to have peace in mind, avoid owning real estate and just put it all into bonds or REITs, if you want to have real estate exposure. For a minimal fee, you will get both dividends and gain from overall real estate appreciation.

Live projects

Good House Music

At the time of writing this post, it grew to 326 subscribers. A 1.5% increase over the previous month. I have uploaded 1 DJ mixes and only 1 new single track. The most viewed track recorded 43 views.

I will keep uploading till I reach 269 uploads, then we will see if it is going anywhere.

Personal Youtube Channel #1

In the previous month, I posted 1 new video on my personal Youtube channel.

I will keep uploading till I reach 246 uploads, then we will see if it is going anywhere.

Personal Youtube Channel #2

In the previous month, I posted 1 new video on my personal Youtube channel.

I will keep uploading till I reach 30 uploads, then we will see if it is going anywhere.

Financia

I got one new customer. Yay! I am so grateful for every single subscription I get. It motivates me to keep it alive.

I also started some groundwork around this new feature I ideated a month back when I had to deal with tracking cheap products, that I need to buy. It is still too early to reveal any details, but this feature keeps me busy and challenged.

So far, I am again enjoying software development after a few months' pause.

It will probably take me two months of my free time to finish an MVP before I can showcase it to the public. It also won't generate any money, as it is more about showcasing my skills and my ability to overcome an intellectual challenge.

Income Report Breakdown

P2P Lending

I am still keeping a few dollars on my account with an Autotrader turned on.

Savings Accounts

Right now, I still keep a small portion of money in savings accounts to cover my living expenses.

Czech National Bank increased repo rates by another 1.25% to prevent further inflation growth. This allowed banks to increase their savings rates along with it.

Now the maximum rate you can get is 2% at The Creditas Bank, but with a low upper limit threshold.

I have to rebalance my savings yet again to reflect the top offers on the market.

I am curious where it ends. Inflation might attack 7-10% next year and governors will try to battle with it by increasing repo rates. If it reaches 4% next year, mortgages rates will shoot through the roof. The era of cheap financing will be over and the cheapest mortgage will start at 6-7%.

This means a one-room apartment in Prague will cost you more than 1000 EUR a month. Given an average salary is about 1500 EUR a month, the increase in the cost of living will put many people into trouble.

Now I am regretting not investing in another real estate, but I would be way overleveraged and would have to cover a major portion of the cost from my own pocket.

Additionally, there were little to no deals on the market, where I would be certain about its future value. In cases, that checked all my boxes, It turned out to be an auction or someone front-run me with way more cash in hand than I do.

So regret but no regret as I did everything according to my gut. If I would live in US and banks would give you a credit line on your home, it would be a different story and I would jump into those deals without hesitation.

Here in middle Europe with strict financing and banking regulations and a way-overheated real estate market, it does not add up.

My hunch tells me financing costs will get back to lower levels in 4-6 years horizon, so I have to be patient and wait for the next opportunity. So far I don't see many evictions and firesales, so let's wait on the sideline and see.

Stock Investing

In October SP Index rose to ATH by 7.2%.

There was another huge correction at the start of October. But this time, I didn't take any losses. But I didn't get a 7.2% profit either due to my safe trading rules, which limits my upside potential. Had I timed the bottom and went all in, I would be better off, but it is always unicorns and rainbows using hindsight bias.

I was right about strong Q4 earning results, but I did not anticipate new ATH so quickly at all. That is because FED does not seem to take any action any time soon. Yes, there were signs about coming tapering, but they were strongly against any hike rates.

While rest of the world including Czechia boosted rates like crazy to slow down inflation growth. FED is still protecting the portfolios of their wealthy friends at the cost of a steeper crash, that has to come, eventually.

I would rather be in cash and limit my upside potential, than ride this manipulated market.

I also did not daytrade as I planned last month. Most of the time I miss the entry point due to a 9-5 job and I don't have the energy and focus to watch positions through the day. What I need is a discord signal alert bot and 30 to 60 minutes on top to babysit the position afterward.

Also, there is an issue with live market data feeds, which are obscenely expensive. To get access to real-time tick data for equities, you have to pay anywhere from 65 USD a month. Sure, it is well worth it, if you know your strategy is 100% profitable and that you can make much more. But right now, I cannot afford to pay for anything since I can not do this full-time.

Used Stuff Sales

My path to life minimalism went well in the previous month. I have sold a DJ controller, the fewer material things I own, the more freedom I get.

Plans, dreams, and wishes

My goals for November are the following. Keep dancing, work on financial features and get back to creating content!

That would be it. Thank you so much for following me on this journey and see you in the next report.

Income Report Oct 2021 - First Troubles With Tenants