Edition #18: Don’t hope for a housing crash

Plus: Optionality, Reading Fiction, RSUs, Crypto Interest, and Outsourcing Tasks.
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WRITTEN BY OZ CHEN

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Today’s compliment: you are what others hope for.

In this newsletter, I’ll start with a rant about the housing market, then followed by nuggets on psychology & money.


🏠 The irony of hoping for a housing crash
With real estate prices at all time highs, this thought has often crossed my mind: “if only the housing market would crash, then I could buy a home at a discount.”

But is this zero sum thinking? Wishing for a housing crash means something else has to give. Is getting a deal on a home worth it if that also means increased unemployment, crime rates and social decay? I’d love to get free shit from the grocery store, but not if that means living through a zombie apocalypse.

Such a hope might be ironic: if you’re eyeing homes in an up-and-coming neighborhood, a housing crash can make a neighborhood less desirable to live in. It’s also kind of like wishing that other people will lose their homes, or at a minimum lose value on them. Not a situation we’d wish on our friends or family.

This isn’t to guilt trip anyone who wants a good deal—I’m an opportunist like anyone else. But there are better things to hope for, like improved zoning laws and increased housing supply.

More rants on this to come. Onto the medley!


Money Medley: mental models, markets and musings

🧠 I’m reading Optionality by Richard Meadows. Optionality is defined as the right—but not obligation—to do something. This book is deepening my perspective on hedonic adaptation. Because happiness has an upper limit, optionality might be a better measure of social progress: do people have an increasing freedom to choose their lives? People might not experience more happiness with a 5% salary increase, but they will definitely be unhappy if their health or standard of living decreased. In that sense, the Human Development Index (HDI) might be a better reflection of optionality than GDP.

📚 Reading literature might make you a better investor
Warren Buffett credits his investing success to being a voracious reader. But do you have to read financial statements and company reports to gain that edge? Jacob Schroeder presents multiple benefits of reading fiction, including enhanced empathy and widening of one’s perspective. While reading fiction probably won’t directly help you pick stocks, it could lead to a higher sense of self awareness, which then supports healthy investing psychology.

To balance out the vast amounts of nonfiction I consume, I’ve been listening to the Poetry for All podcast.

💰 Treat RSUs like cash bonuses
Restricted stock units are taxed once they vest. This article puts it in a way that I haven’t considered before: “If your company gave you a year-end bonus of $100,000, would you use all of it to buy your company’s stock? Hell, no.” This advice suggests literally tapping into your optionality: sell RSUs before they (potentially) lose value.

📉 BlockFi drops crypto interest rates
My favorite crypto savings account dropped Bitcoin interest from 6% to 5%. This post explains more than the generic message you get from other services: there’s “low demand to borrow BTC in a bull market, since many market participants want to borrow USD to buy more BTC instead.” Lower incentive to borrow any asset means lower interest paid to borrow that asset. I’m considering shuffling funds around to other crypto interest accounts like Celsius and Nexo.io, and am testing a new account at Constant.

🐰 Money tip: using money to buy time is linked to happiness
Research shows that outsourcing un-enjoyable tasks leads to increased happiness. This applies across income groups, so it’s doubly surprising that out of 850 millionaires surveyed “almost half reported spending no money outsourcing disliked tasks regardless of how much money you make.” You don’t have to be Mrs. Moneybags to get value from deep cleaning the bathroom, or these other most hated tasks.

I’ve been avoiding doing yard work (why I don’t have a gardener is a longer, much more boring story). I booked my first job on TaskRabbit and already feel more empowered about my mess of a front yard. If you want $10 off your first task, here’s my TaskRabbit referral code.


P.S. Meet Japan’s Trash Collecting Samurai

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