How I’m reducing my budget by $1k this month.

Are you spending wayyyy to much money and not sure where it is going?

That’s the situation I found myself in this last month.

I have a monthly plan to review my credit card statements, but after the end of last month I had the question: “Where did it all go?”

What Doesn’t Work (for me)

I’ve looked at things like to track expenses, but so far I haven’t found anything I like. does a horrible job of classifying expenses (side note: I have high hopes for UGHMoney).  How should I know what to cut and what to keep?

How I’ve Cut Expenses in the Past

My method in the past was pretty simple:

  1. Review my bank and credit card statements
  2. Identify recurring expenses
  3. Cut these recurring ones out

I decided up front to save money, but not be a cheap skate. I only wanted to cut out those things that added marginal value for me.  Some things (like spotify) I plan to keep as a) they don’t cost much and b) they provide plenty of enjoyment.  For others, I decided to substitute cheaper alternatives.  Ting, for example, was a much cheaper carrier than verizon.

A bunch of these took several months to phase out.  I decided to keep a spreadsheet of these expenses:

Some of these things were providing zero value to me.  Others (like smoking) were actually hurting me.  And others I enjoyed, but just weren’t worth the money.

Overall, I’m saving $600 per month – over $7k per year!  And that’s just from recurring expenses that I don’t care that much about.

How I Continue to Cut Expenses Each Month

After reviewing my credit card statements a few times, I realized the easiest way is (gasp) paper!

I’ve switched back to paper billing for my credit card statements.  I get the statements once a month and circle any charges that I’m unsure about (or anything I want to cut out).  It only takes a few minutes and keeps me conscious of what I’m spending.

My New Method of Cutting Expenses

But as mentioned before, I had cut out all of those pesky recurring items without having a good sense of where is my money was going.  My biggest issue was that I had a ton of little expenses.

Yes – I could classify them.  It turned out a large percentage were going to food (eating out / drinking out) and personal development books and courses.

I wanted a way to set some limits on each of these categories and “bucket” them (or confine/categorize them) to a certain dollar amount each month or each week.

After some googling, I discovered “Envelope Budgeting.”

Envelope Budgeting is basically this: when you receive your paycheck, you create a series of envelopes.  You put a fixed amount of money into each envelope at the start of every month.  (For instance: $1000 into the rent envelope, $500 into the food envelope, etc).  Any time you spend money, you just take it out of the corresponding envelope.

Using Cash?  No way!

This technique of bucketing your money and only spending what you’ve allocated through cash envelopes is of course really old school.

I don’t carry around cash ever. I pay for everything with credit cards. (I don’t have debt on credit cards.  I actually use them as cash back debit cards).

Luckily, there’s an answer for millennials: an app!

I’m currently using “GoodBudget” on the iPhone.

How it works: basically, you create a series of “envelopes” (buckets or categories) and allocate money to each of them.  Every time you make a purchase, you manually set the category, who you paid, and the amount.

Turns out that manually entering this stuff makes you very conscious of what you are spending.

Here’s a screenshot from my actual budget:

When that green bar goes down to empty, I’m out of money in the envelope.

And that little black horizontal bar shows where I should be to be on pace.

If I go over, I can visually see that.  And I can tell how long I should cut out spending in that category:

I already know this is going to help tremendously.

What’s your best budgeting tip?  What are you doing to reduce expenses?

Income/Financial Freedom Report – April 2017

Big changes this month:

I’ve moved $10k more into my trading account.  Since my trades have been going swimmingly, I’ve decided to double down on credit spreads.  I’m trading a very, very simple strategy which I’ll have to tell you about in a later blog post.  What’s amazing is the capital invested in this is: a) less than my 4 unit, b) so far has produced higher returns and c) is liquid.

The other big thing to notice: my expenses went way up.  The main cause: I had to pay estimated taxes: over $2k!  I didn’t get all of my documents to my accountant to time, so he filed an extension on my behalf.  I corresponded with him and it turns out he didn’t add depreciation, etc, when he calculated my estimated taxes…so, we’ll see if I get some of that money refunded.

With that said, I’m looking (today!) into making some radical cuts in my day to day budget.  I’m trying to create a business and bootstrapping it, so every dollar saved is another day of runway for getting my business off the ground.

(N.B: So – it turns out I haven’t been adding property management in the last couple months to my 4 unit rental property.  This means in the last few months I’ve only been at 33% and 29%, respectively).



Roughly the same as last month.  I’m still quite happy with this.  Of course, I’m ultimately aiming at getting to 100%.

My job has now wound down, so mostly I’m looking at ways to make an active income, but not as an employee.  Rather, I’m starting my own business (doing FBA – more to come later) and doing a bootstrapped startup.

I’ll blog more about those things later.  For now:

Vertical Credit Spreads

This is based on Net Liquidation Value.  I’m now about 70% invested, and as I write this, I’m actually transferring another 10k into my trading account.  I know the tide will change eventually; the nice thing about credit spreads is that you can invest in whichever way the market goes.  I’ll blog about how I’m doing this eventually, but for now, it seems to be working, so why not double down?

As far as I see it, If I doubled down on my credit spreads, I could potentially up my passive income total to $2600, which would put me at closer to 50%.

Udemy + Skillshare

Skillshare actually, to my surprise, came through with a few dollars.

OTOH, I also decided to let Udemy go (just let it do it’s thing without investing any time / resources / money) into promoting the course.

I slipped to the second page of search results and only made one sale.  I was also playing with price – raising it to $45 from $20 where it was previously.  All of my sales happen when Udemy is running it’s discounts and they are discounting everything to $10 or $20, so I figured – what the heck?

136 N 10th

The apartment complex is still the biggest winner by far.  Also the largest investment. Luckily everyone seems to be paying (more or less) on time.  Also, got hit with roughly $400 in fees that need to get paid to the city for running a business.  I knew they were coming, but didn’t know that I’d be paying fees when I purchased the house.


New domain –!

Just migrated from to, as I finally bought the domain –

(For those who don’t know – is the blogging software that the company gives away, is their hosted version – which is free, until you want a custom domain, or show ads, etc).

WordPress is famous for it’s “15 minute install”. This certainly didn’t take 15 minutes, but then again I was web developer in my past life (and still do a bunch of it) – so I decided to do it all manually.

This led to lots of struggling with apache configs, php 7 upgrades, etc.  What else should I have expected?

The good news: I got it running, and this blog is live at  And eventually this will be a passive income source. 🙂


Oh yeah!

Screenshot 2017-03-04 15.43.35.png

This month was a huge win for me.  Notice that I started tracking expenses and calculating what my financial freedom % is.  Obviously at 100%, I’m financially free!

Some new things:

Vertical Credit Spreads

I’ve been long SPX/RUT, which has paid off.  Really, I’m just going with the trend.  Will it reverse soon?  Maybe, but I don’t think anyone really knows.  I’d much prefer to be in line with the trend then an angry contrarian for many months or years.

136 N. 10th – 4 Unit

Good cash flow this month.  No major repairs.  One tenant accidentally sent his rent to the wrong property management company (as they have two branches).  I had to ask them what was going on to find out this story.

Apparently the money takes a few days to be given back to him.  He left a good faith $200 with the right property manager, and he’s always paid on time, so I’m going to give him the benefit of the doubt and expect to collect the difference next month.


Came through in a big way. I spent a bunch of money on promotions.  I’ll give a full breakdown at some other time, but here’s what didn’t work: 1. posting on reddit, 2. adwords.  here’s what did work: fiverr.

What’s nice now is that some organic and affiliate sales have just started to happen towards the end of the month.  And that’s where the real passive income is.


I extracted my money from treasury direct.  It was paying less than 1% a month.  I can do better elsewhere in a money market account.


Haven’t received anything from them yet.  They only pay out if students have watched 30+ premium minutes.  As far as I can tell, I’m at 33, so I expect to get paid something. Settlement date is only on the 16th, so if I get anything, I’ll count it next month.

OnClick Academy

They contacted me out of the blue. I’m literally uploading my courses to their site right now.  Let’s see if it can be another passive income stream.


Interesting Startups in Real Estate

There are some interesting startups in the real estate world: – No mortgage commissions.  I might just use them for my next purchase. – hard money lending at 90% LTC, 80% LTV – skipping real estate agents. – real estate agents with half the fee.

I think the real estate industry is ripe for disruption.

Mark Cuban on The Future of Jobs and Trump.

Starts out by talking about Trump.  It’s absolutely crazy that Trump doesn’t use Google.

But more interesting is how the nature of jobs will change.  Cuban thinks that even most programmers will be gone in the next 5-10 years. And that liberal arts majors will be the real winners in the next 10-20 years.

The Reason for this blog

It occurred to me the other day that the title of this blog and the very first post seemed a bit “privileged.”

It might come across that I’m asking “how do you milk other people of their money?” or how are some people “lucky enough to inherit this money?”

I think the former is dishonest, and the later is lucky (albeit undeserved), but I’m not in that situation, so I’m not concerned with asking that question.

The real question of this blog: How do you go from middle class to upper class?  How do you make your own fortune, instead of relying upon luck or good fortune?

I don’t expect to be a mental couch potato and hope it all works out.  I know, ultimately, that my mind will create my reality and I’m in control of what happens in my future, good or bad.  The question is: how do I get to a good outcome?

Random Thoughts on Using OPM (Other People’s Money)

Question: I would like to hear from someone who didn’t have any money and used someone else’s $$$’s to invest. I don’t understand this concept and need to learn more about it.

Answer: It’s everywhere!

Probably the most common strategy is in real estate – it’s not “no money” – but 20% money. For instance, a building that costs $100k. You put down $20k, the bank puts up the rest. You make a small profit every month (say $100 after all expenses + PITI are covered), and get plenty of other advantages as well (appreciation in the market, loan payoff over time, deprecation through taxes, inflation of rents while your mortgage stays at the same rate, etc. etc.).

Obviously if you have no money, you find a good deal and look for investors. And it’s basically the same strategy, except they get a portion of it, and you get a portion of it.

There are lots of other, more complex “no money down” real estate types of transactions (owner financing, etc.)

There’s also flipping with debt financing (usually private money). You take a house, and take on debt from a creditor. You provide them with a high interest rate. In exchange, you do construction on the house. You then sell the house for more than the construction + the price you paid for it (financed by the creditor) + interest on the loan, pocketing the difference.

Or consider any business that is started. A traditional brick and mortar business: you go to a bank and pitch them on your idea, how you’ll make money, etc.. You take on the debt, and are expected to repay them with interest over time.

Or consider startup companies. These are equity financed instead of debt financed. You pitch an idea to an investor, and – if they think it has potential and they like it, they give you money in exchange for a portion (equity) of your company (but – you don’t owe them anything if the company goes bankrupt.  This is why it’s “equity” instead of “debt”).

Or consider writing an e-book or a video course on Udemy/Skillshare/wheverever. It takes your time, but probably not your money. You publish this on amazon or wherever. Every month you make some money off of sales. This is a no-money down transaction.

If you are short of money, you can always swap time. This is what most people do when they work jobs. They trade their time for fixed amounts of money.