Hey neighbors, happy Thursday.

A close friend of mine has been wanting to start his own business. Instead of starting from scratch, he started browsing businesses for sale. Last week he found a local news publication for sale that markets itself as alternative media. He's been crunching the numbers and is in talks with the co-founders.

It got me thinking about content ideas for the newsletter. So today I'm kicking off a new segment: Napkin Math. I'll grab a real business-for-sale listing here in NYC, run the numbers, and decide if it's a buy or a pass. It won't be every week, but when I find something interesting, we'll break it down. And btw, I’m not an expert so you can learn along with me. Oh, and respond to the poll below this story. I wanna see if y’all like it.

Could be fun. We'll see.

Anywho, on to this week's content 👇

🍽️ New restaurant: Ambassadors Clubhouse opened on in NoMad recently. Punjabi menu, $48 lamb biryani, and scotch poured from five-liter bottles. Reservations are still non-existent. Maybe try a late walk-in? Reserve (if you can)

🏠️ NYC real estate: The most expensive condo ever sold in the UES just went into contract. A penthouse at 1122 Madison Avenue, asking $89.5M at $9,572/sq.ft. It spans three floors with 7 bedrooms, nearly 2,000 sq. ft. of outdoor space, and a rooftop terrace with a kitchen overlooking Central Park.

🏒 Hockey's back: The Rangers host the Penguins this Saturday 2/28 at MSG. Come welcome back Vincent Trocheck and J.T. Miller, who helped Team USA beat Canada in OT for Olympic gold. Head coach Mike Sullivan was behind the bench for that one too. Buy tix.

Nasdaq | $22,869 | -1.58% 🔴

S&P 500 | $6,900 | +0.62% 🟢

Bitcoin | $67,290 | -23.02% 💀

Cash Confessionals are anonymous, weekly stories where NYC locals peel back the curtain and expose their money habits. Wanna submit yours? Go here.

Career: Director in health insurance. I don't really think about whether I love it or hate it, it's a job that pays me well. There are some parts I enjoy, like solving problems, and some parts I don't enjoy, like stressful periods when there are a lot of overlapping deadlines with short timelines. I'm the kind of person who sees that things need to be done and buckles down and does them even if they're not fun. That's just what the job calls for sometimes.

Net worth: ~$700K. I started contributing to my 401(k) and Roth IRA early on, and started maxing out my contribution limits once I felt I could comfortably do so. From there I just let the market do the work. Time in the market beats timing the market, according to the Bogleheads.

Salary: $200K base salary, 20% target bonus dependent on company performance.

Salary journey: I started at $65K working as an analyst in this field. I was able to job hop right after COVID during the Great Resignation for a significantly higher salary and better work/life balance, helped along by a referral from an ex-coworker. I was promoted about a year later for another significant increase after taking on new responsibilities.

Living situation: I rent a one bed one bath in LIC for $3.5K/month and live by myself. In-unit laundry, my own balcony, and rent stabilized!

Financial goals: I'd like to retire by the time I'm 45-50 and be able to focus on hobbies that I find joy in, like traveling. I feel pretty good about my current financial situation, although focusing on hobbies recently has set back my retirement timeline. I'm still trying to find a balance between retiring earlier versus spending more money on enjoying hobbies while I'm still working.

On my mind: Navigating taxes and trying to keep track of everything happening throughout the year that has tax implications, like making sure I'm not over contributing to my 401(k) or HSA.

Rich in NYC: I think "rich" and "living comfy" are two different things. Living comfortably requires $150K+ salary, but I wouldn't consider that rich by any means. What I'd consider "rich" is never having to think about how much something costs before buying it, and I don't even know how to quantify that.

Career advice: I tried to anticipate what questions my manager would think about or ask while reviewing my work and answer them ahead of time to make their life easier. Or even anticipate what they might be asked by their manager and prepare answers for those questions. I kept track of all my own work, was proactive about managing expectations, providing progress updates, and asking for help when I ran into a problem but only after I tried to solve it myself.

Side hustle: Someday I'd like to start selling my own art, but that'll probably have to wait until after I retire.

Spending: 1-2 dinners out, a happy hour or two, booking travel for my next trip, and maybe some shopping.

Biggest expense: I spend about $20K/year on traveling and other hobbies.

Favorite credit card: PayPal Mastercard for anything I'm buying online that I can pay with PayPal and get 3% cash back.

Debt: I put everything possible on credit cards and have autopay set to pay the statement balance every month. I don't have any other debt. I don't really see debt being part of my life unless I were to buy a place, and I'd prefer to avoid it overall.

Emergency fund: I keep about $40-50K in a high-yield savings account in case I ever lose my job.

Best money decision: Honestly, I was extremely privileged to have my college tuition paid for by my parents, so I can't even claim that it was my own decision that set me up so well for life. That aside, I think contributing to my retirement early was the best decision I actually made.

Worst money decision: When I converted an old 401(k) to Roth IRA in the same year I got a great bonus at work and probably paid way more in taxes than if I had planned the conversion properly. I never calculated what the difference would be because I think I would just be more upset if I knew the real number.

Can't live without: Spotify Premium. I'm constantly listening to music so paying to get rid of ads is so worth it.

Investment strategy: I put all my money in broad market ETFs. My approach is to be as hands off as possible, which means investing in assets that are already diversified.

Financial freedom: Not needing to work and still being able to fund my hobbies.

Retirement: I'd like to have $3M before retiring, and am hoping that will happen around 45-50. I'm looking forward to having enough free time to actually get around to the many hobbies I've been neglecting.

📧 Submit your own Cash Confessional for an upcoming newsletter. Go here.

📣 Like I said, I've been nerding out on businesses for sale in NYC lately, and figured why not bring you along? I'll grab a real listing, run the numbers on the “back of a napkin”, and decide if it's a buy, a pass, or a "call your accountant" type of thing.

This week: A cashless laundromat on a high-traffic Manhattan corner.

Asking price: $590K
Revenue: $338K/year
Cash flow: $120K/year
Rent: $14,400/month
Equipment: 40 refurb Dexter machines (apparently one of the best brands)
Equipment age: ~10 years old (getting close to the end of their usable life)
Lease terms: ~14 years remaining
Has been open for: ~1 year

At first glance, $590K sounds like the cheapest way into a Manhattan-based business. For context, I looked at four laundromats for sale in the city and the average price was north of $700k.

Here's the problem: The rent eats 51% of revenue… That’s massive. That means half of every dollar a customer spends goes straight to the landlord before you pay a single employee (if you don’t self-manage) or utility bill. And I imagine a laundromat utility bill is pretty high.

The other numbers don't help either. You're paying a 4.9x multiple on earnings, meaning nearly five years just to earn back your purchase price. Other Manhattan laundromats I looked at are selling for 3-4x, so this one's at a premium. The equipment is 10 years old and refurbished, so a major replacement cycle could be looming. Refurb Dexter machines run $3K-$4K each. That's $160K+ to replace all 40. They won't all die at once, but the bills are coming. And the business has only been open a year, so there's no real track record to lean on.

And that $120K cash flow? It's not $120K in your pocket. The listing says two employees plus the owner "assists occasionally." If you want to be hands-off, you're hiring a third person or bumping someone to manager pay. Then add SBA loan payments (currently around 9.25% over 10 years) and you're left with maybe $15K-$20K a year. On a business with equipment nearing it’s useful lifespan.

The verdict: Pass at $590K. This is the lowest sticker price of the four laundromats I analyzed this week, but the worst actual deal. This one's interesting in the $275K–$350K range, but good luck getting the seller to cut the price in half. As it stands, you're basically buying the lease and betting on yourself to grow revenue. Not to mention that it's only been in business for ~1 year and the owner is selling. Feels fishy to me.

Here’s the listing if you're still interested. Don’t say I didn’t warn ya!

Have an NYC business listing you want me to napkin math? Reply to this email.

Thanks for reading this week’s edition. If you have ideas for stories, know about new business coming soon, or want to do your own anonymous Cash Confessionals submission, let me know!

Josh Stilwell

P.S.

Read something you like or maybe don’t like? Hit reply and let me know!