Hello Friday. Let’s jump right in. I got laid off last week 🤪

Don’t worry I’m gonna be fine.

My job was impacted somewhat indirectly by AI. It was also a good reminder that relying on just one single income source is a huge risk…

Even if you have 6 months expenses tucked away for that rainy day (the bare minimum, really) it’s gonna suck to burn through that while finding a new opportunity.

What I’m doing in the meantime:

If you’re interested in building with AI, check out this post I made on LinkedIn about how I’m automating my job search 🤖 (no, I’m not gonna sell you a course).

Anywho, let’s get to it!

🏯 Now open: Stone & Soil in Kips Bay. Japanese cocktails, small bites, serious hospitality from a stacked crew (Bar Trench, Bar Moga, Bungalow). Soft opening ends tomorrow. Reservations.

🎷 Happening: Live jazz at Nook, Saturday 7pm. Bushwick's “experimental” coffee and craft beer spot. Cozy laptop and conversation spot. Free.

💡For Sale: 4-year-old Shopify home lighting biz asks $1.36M. $412K cash flow, ~80% gross margin. Dropship model, no inventory. 60K email list barely touched. 10-15 hrs/week to run. Buy it.

Nasdaq | $23,549 | +1.35% 🟢

S&P 500 | $6,939| +1.18% 🟢

Bitcoin | $82,971 | -5.08% 🔴

Cash Confessionals are weekly stories where NYC locals peel back the curtain and expose their money habits. Wanna submit your own Cash Confessional? Go here.

Financial goals: Our goals are similar to most New Yorkers I believe. We want to continue to save for retirement, build a strong emergency fund, and give our kids large college funds. I feel okay about our financial situation. NYC/Connecticut is one of the most expensive places on the planet and we just bought a large house, so any hiccup to my job or my wife's job would put us in a tough spot. I think if we lived in a lower COL area I would feel way more confident. But I also acknowledge we're choosing to live a high expense lifestyle. No one forced us to have high fixed costs.

On my mind: We just spent most of our savings to purchase a house in a highly desirable location in CT, so we don't have much of an emergency fund right now.

Rich in NYC: Interesting question. My wife and I are high earners. I make $400K and my wife recently started making $800K before we moved. Compared to 99% of the planet, we make a lot. But in NYC I do not feel super rich. Our effective tax rate is very high, school and nanny are expensive, and now our new mortgage is large. But we definitely make enough to feel comfortable, obviously. I think the minimum needed to feel comfortable in NYC is $250K a year. To feel rich? I would say $2M is needed.

Net worth: Around $4M right now, including real estate minus mortgages. My wife and I got there the boring way. Do well in high school, go to an Ivy League college, and work a boring but high-paying white collar job.

Living situation: We just moved from the city to Connecticut. We really extended ourselves to buy our CT house. The monthly mortgage is kind of crazy. It’s $16.5K plus utilities. We also own three apartments in and around NYC that are rented out. The rent barely covers the mortgages and common charges. We charge anywhere from $2,500 for a small one bedroom up to $8,500 for a luxury two bedroom.

Career: I'm an investment banker and my wife is a doctor who just finished her residency. I hate my job and she loves hers. High finance pays handsomely, but it's as boring as any other corporate job. The worst part is the 24/7 hours, but also the large personalities you have to deal with. When people make large salaries, it always affects their personalities. I've seen nice people turn arrogant and impatient as their income grows.

Salary journey: I entered investment banking in 2011. My first year I made $125K and it has slowly gone up each year. I didn't really want to be a banker. I just randomly applied my senior year to a bunch of places and took the first job offer I got. It took me some time to realize how crazy high the starting pay is compared to other corporate jobs. If I ever left banking, I would have to take a large pay cut.

Career advice: I actually feel like I've underperformed. For the amount of years I've been a banker, I should be making closer to $1M a year vs. $400K. So while compared to the average person I've done well, compared to my peers in finance, I actually haven't done that well. In my particular case, I try to float by and find a balance between not getting fired and having a reasonable work/life balance. To rise in finance you have to be willing to put in lots of hours, and that's just not me.

Other income: One thing that has really helped my wife and me is the fact that we both have supportive and successful parents. We make a lot on our own, but we also have parents that have given us great help. We both went to top colleges that our parents paid for, and they've helped us buy real estate. I'm cognizant not everyone has successful and supportive parents, but it's a huge reason people can start to build real generational wealth. We own a few apartments in the NYC area due to our parents partnering with us on the down payment. We're only breaking even on those right now, but I hope they turn into real side income over the next decade.

Side hustle: No side hustles. Life's too short to work more than we do now.

Expenses: Factoring in our kids' activities, I would say we spend $2K a week to maintain our lifestyle, in addition to the usual bills.

Biggest expense: Outside of mortgage? Our nanny and children's school.

Favorite credit card: I have a card that gives me extra cash back on all Amazon purchases since we order a small country's worth of packages each year.

Debt: Only debt we carry are mortgages. My dad taught me that debt is for the weak. Meaning if you can't afford something in cash, it's not worth it. He grew up in poverty, so he always made me cautious with debt. I know some people need to rely on debt just to survive right now, but I've also seen so many friends go into debt for toys or vacations they don't really need. I've found my American friends like to live above their means and my foreign friends are more able to accept living below their means.

Emergency fund: I used to have a $50K emergency fund, but that went away to buy the new house. My wife and I make a lot, so it will be quite easy to build that back up. I think a single person should have an emergency fund that covers six months of living expenses.

Saving for: Nope, the house sucked up all our investment money and cash accounts. No big purchases for the next five years at least.

Best money decision: Starting a Roth IRA when I was 16 and maxing out my 401(k) every single year since I started working, no matter what.

Worst money decision: When I deluded myself into thinking I was good enough to play poker professionally and gambled away $600K in my twenties. Gambling is a worse vice than alcohol or weed in my opinion.

Can't live without: Honestly, outside of my crazy poker dream, I'm kind of boring with money. I guess I can't live without high-speed internet since I like to game on the weekends.

Investment strategy: Due to the recent home purchase, I don't have an investment account anymore. I liquidated it for the down payment. But my investment portfolio will always be boring: all my excess cash goes into the Vanguard Total Stock Market Index. Unless you work at a top hedge fund or have inside information, it's almost impossible to beat the market over the long term. Shocking how many people don't realize that.

Financial freedom: For me it’s simple. Never having to work and your passive income covers your lifestyle. For me, I would probably need $10M, unless I was willing to leave the NYC area.

Retirement: My plan is to work until my net worth closes in on that $10M number. My dad and father-in-law have done well, so I'm expecting some inheritance to help me get there.

Long-term goals: I want my kids to have a better childhood than me. I had a very happy childhood but I grew up lower middle class. My dad didn't become successful until after I left home. So I want them to have the chance to go to the best schools, debt free, and the flexibility to choose something they love for work and not just what pays the best.

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

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!