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What Workforce Skills will the Next Generation Require?

credit: Pan Xiaozhen on Unsplash

credit: Pan Xiaozhen on Unsplash


My son attending kindergarten received a note stating that he was receiving an award and that the award ceremony would be held in the school auditorium in the evening. It’s always great to hear that your child is receiving an award and for whatever reason, my mind automatically assumed that he would be receiving the math award. (I swear it’s not because we’re Chinese! =) He had received perfect scores on his previous two math assessments so it seemed likely he would get that award. At the ceremony, they called out the winners of the math award and my son was not called. And once again, for whatever reason, my mind jumped to thinking that perhaps he would be receiving the “Student of the Month” award for his overall academic excellence. They called the winners of that award last so we’d have to wait. Instead, they called the winners of the “Best Citizen” award and my son’s name was called. He was so excited to hear his name and go up on stage to receive his award, and I was a proud papa too.

Having observed him in class a week prior to the awards ceremony, it was clear why his teacher chose him for that award. As the kindergarteners arrived in the classroom, their teacher set a timer for four minutes to put their jackets and schoolbags in the closet, their lunch box on the counter, place their homework folder and workbook in a pouch behind their chairs. Once done, they are to sit at their desk and read quietly. My son was neither the fastest or the slowest in getting ready. Actually, he was probably in the slower group if I had to be honest as I saw many students already sitting in their chairs and reading. When my son was finally done with everything, he saw a student at a different table struggling to get things ready. I saw my son go over to the student to help him unpack his school work and placing it in the pouch, before going back to his own seat to start reading. I was happy to see him help someone else out as oftentimes children are self-focused and think mostly about themselves. That was just one example I saw of him being a “good citizen.”

I’m not going to lie though, a previous me may have been a little disappointed that he didn’t receive an award for his academic prowess. In the past, I remember thinking that I would push my kids towards the STEM fields (Science, Technology, Engineering, Mathematics). If they want to be economically successful, the STEM fields are where you find the high paying jobs and jobs in these fields would likely remain in demand. With automation and artificial intelligence on the horizon, jobs in these fields are much safer than in other fields. I remember judging people for their choice in majoring in something in the humanities. How do they expect to find a job? How will they pay their student loans with a low paying job? Surprisingly, growing up, I was naturally more interested in the humanities and struggled with the sciences and advanced mathematics. I majored in Business in college, but added another major in Political Science which was a subject I found more interesting. I eventually went on to get a law degree.

In a recent Afford Anything podcast where Paula interviewed Suze Orman, Orman said that the U.S. would probably experience 25 percent unemployment in the future as AI taking over many jobs. In a related podcast episode, Paula spoke to Darrell West, author of The Future of Work, about artificial intelligence, robots, and the future of jobs. It is no surprise that robots and AI will take over many low-skilled jobs, but West said that it may not just be entry level jobs. There are higher level jobs that may be at risk as well. For example, West explained that radiologists currently read CAT scans, but AI systems can learn to read scans with a pretty high degree of accuracy. And as for me working as an attorney which many would consider a higher level job, AI systems have their tentacles in that industry as well. So I won’t be safe either.

Paula suggested that one way to prepare for this future is by strengthening soft skills (empathy and social skills) which were once lower valued in the marketplace. She suggested that these skills may be increasingly more important because AI might be able to read a CAT scan, but they won’t have good bedside manner. In a World Economic Forum article, it said that according to PwC’s workforce report, 39% of CEOs considered the impact of AI on skills their businesses will need in the future and included: problem-solving, adaptability, collaboration, leadership, creativity and innovation. It mentioned the importance of emotional and social intelligence of future workers which would differentiate the human workforce from an automated one. One member said, “Though we can teach human emotions, there are no standards for emotions and the machines will not or may not be able to mimic the natural ability of basic instincts of human beings.” Another member of the forum advocated for bringing the human and robot workforces together, connecting “engineering thinking (fixing broken things and inventing new ones) to human sensitivity (following your heart).”

So what work skills can prepare my kids for the future as the future is filled with uncertainty? As hard as teaching math to a child appears, teaching emotional and social intelligence may even be harder. I want to foster a love of learning in my children as learning shouldn’t just be limited to schools. With an ever changing world, everyone needs to be a life long learner and learning should not be a chore if you love it. I want to teach them empathy and to build their self esteem and self confidence. I want to encourage them to be leaders not followers. Ultimately, I want to empower them to have the ability to choose whatever path they feel is right for them in their future.

Frugal Hacks I Avoid

Photo Credit, David Niblack, Imagebase.net

Photo Credit, David Niblack, Imagebase.net


Frugality has been ingrained in my head (immigrant parents). When I told my co-workers that I wasn’t getting an extravagant gift for my wife for Christmas, I could see the pity in their eyes for my poor wife. Of course, they don’t realize that my wife can sometimes be the more frugal one (link) in the relationship! I still hold onto my frugal card but there are some frugal hacks that others encourage which I just can’t be bothered with. Maybe it’s because I’ve grown soft now that my income has grown, but there are some things I value more than a small savings.

Costco/Wholesale Clubs

My wife and I have been members of BJ’s wholesale club because they often send free membership invitations for 60 days. Once, I was also roped into joining for a year with co-workers, sharing the membership costs. Even with the free and discounted membership, I just do not like wholesale clubs. The main reason is that I hate lines. Every time we’ve gone to BJ’s or Costco, the lines stretch beyond what my eyes can see. We went one time on a random Thursday evening and there was a lot people there! Another reason I don’t see a need to shop there is that we have a small apartment (link) and while we have a growing family, the two little ones don’t eat that much. This might change as they become teenaged boys. I don’t want to shop in bulk as there is no space to put all that stuff. Plus, we have a bad tendency to let things go bad because we don’t use it. Finally, I don’t find the prices all that compelling. Prices are okay but not worth my sanity.
***After writing this post, but before publishing, my wife had a deal through her credit card to get a free Costco membership for a year. As it was free, I relented and agreed to sign up. Last Sunday morning, we attempted to get their early in the morning when it opened at 10:00. We got there at 10:20 and it was already a madhouse. I know it’s the weekend before Thanksgiving but it was as if it was Black Friday.***

DIY

Sure, doing it yourself saves some money and there are some things I’ll try. But that are also plenty of things I’ll pass on. Yes, I know YouTube is available to explain how to do just about anything, but for me, some things are just best left up to the pros. And sometimes, I’m just too lazy. There, I said it! I will pay for the convenience of having someone else do it for me. I know some frugal people out there who cut their own hair or their spouse’s hair. Nope, not me. I don’t want to take the chance screwing up my wife’s hair cut. And I’m not sure I want to have a horrible hair cut either. I mean, it only costs about $8 to $10 plus a tip. Oil Change? Even if I had a garage, which I don’t, I’d rather not crawl under my car to change the oil when I can get it done in a half an hour for like $30. And for DIY, fixing things around the house, I’ll admit I’m not that handy.

Stocking up

See above. Sure if toilet paper is on sale and it’s a great deal, maybe I’ll buy a few packages. However, I know people who have their basements are garages stocked up with stuff. I guess they have more space so it’s worth it for them. But even then, it might be dangerous for us because like I mentioned above…we often forget what we have.

Couponing

If there is a coupon staring right in my face and it is a product I use, I will cut it out. But I’m not going to great lengths searching out coupons. (I will do a search online for a coupon whenever I buy something online though). Generally coupons for products are for name brand items and I often buy generic. Another thing is that coupons are often for products that I don’t really want or need. Having a coupon might actually encourage me to buy something that I might not have bought otherwise.

No Air Conditioning/heat

Growing up, the only air conditioner in the house was in my parent’s master bedroom. When it got really hot and humid, it would be turned on in the evenings when we went to sleep. Our family of four would be consolidated into the room, with 2 mattresses on the floor for the kids, so that we could enjoy this luxury. During the daytime, my mom suggested that I go to the library to enjoy the air conditioning free of charge. Actually, that was a pretty good idea. I got free AC and I got to read! Nowadays, I turn on the air conditioning pretty often in the summertime, although it’s usually set at 75 to 77 degrees. I hate being hot and am very unproductive in the heat. I’ll gladly pay the higher electric bill for the comfort and increased productivity.

What frugal hacks do you avoid taking part in?

My AirBnB Saga: When Backup Plans Fail

Buffalo Airbnb

“If you don’t have a Plan B, you don’t have a plan.”

About two months ago, when the property manager of my AirBnb completely dropped the ball, I was forced to manage it myself from a distance and I was stressing out. Luckily, I had relative who lived nearby help me out and I handled the guest communications. This worked out temporarily but I needed a permanent solution. As I mentioned in a previous post, having a backup plan is essential. Actually, it is also essential to have a backup plan for your backup plan. I had a few backup plans in place so I wasn’t too worried. It was not until those backup plans started to fall a part that I did start to worry.

“If plan A doesn’t work, the alphabet has 25 more letters”

Plan A: Find another person to manage the property. After listening to Biggerpockets and reading a post on Mr. Money Mustache, I learned that Zeona Mcintyre attained FIRE with her AirBnB properties and also successfully helped others manage them. I guess she takes FIRE seriously because I didn’t hear back from her for a while. Apparently she was busy traveling, but she did finally get back to me and looked over my property. Unfortunately, after her review, she told me that my property was not the right fit for her to manage. I’m assuming she generally manages higher end properties. Off to plan B.

Plan B: Rented.com. So this company says that they match short term property managers with owners who want their second home or vacation home managed for them. The company offered the standard commission based management structure but focuses on what it calla a “guaranteed rental contract,” where the owner would be paid a fixed monthly amount. The site has a calculator which estimated the monthly rent amount to be around $1400 which was great because market rent for a long term rental of one of my units would be $750. However, the person I spoke with at the company believed that the guaranteed amount would be slightly lower after he received more information. It took a week or two for the company to find a local property manager who was interested in managing it. She went to look at the house and it appeared that the guaranteed rent would be even lower than initially suggested. At this point, I wasn’t as sure if I liked this option as much but I was dealing with some issues managing the AirBnB from afar and it was still a strong consideration. Then I was told that the manager decided that she did not want to manage the property. Based on her profile, she mainly manages properties in a ski resort an hour south from my property so that may be why it wasn’t a good fit.

Plan C: Turn it into a long term rental. As I mentioned above, the property would rent for $750 per unit (it’s a duplex). That amount isn’t too bad since the rental income would cover all my expenses with a decent amount of cash flow to spare. However, from what I’ve heard, the tenant quality is not the best in that area. The other downside, which is probably the biggest downside, was that the property was already furnished and I spent a decent amount doing so. What would I do with all that furniture? This would be a last resort so let’s continue with Plan D!

Plan D: Self-manage. After I terminated my contract with the property manager, I was self-managing the AirBnB with the help of my relative for about a month. Things were going relatively smoothly and I received a few positive reviews. However, there were a few issues that came up which made me reconsider self-managing. A guest called me up at midnight with an issue with the air conditioner in one of the rooms. I was able to resolve that issue as well as another issue relating to a broken toaster the next day with help from my relative. I gave the guest a discount for the inconvenience. With another guest, he had some problems with the electronic keypad. I was on the phone with him for awhile on Labor Day while I was on vacation with my family. That issue was resolved, but I realized that I didn’t want to have to deal with these issues, especially when I was often helpless being so far away. I think if the property was very new and everything was updated, things would run smoother. However, it is an older house and while I did make a lot of repairs to it after I fired the property manager, things just go wrong more often in older houses.

Plan E: Contact other AirBnB hosts in the area. Having difficulty finding anyone willing to manage the property, I knew I needed to at least have a reliable cleaner. I contacted a couple of cleaning companies but they did not clean AirBnbs and many actually wanted to set up an appointment to give me an estimate and come back the following week! Wow! I’ve never hired cleaners before but that’s the first time I’ve heard of that policy. I contacted other AirBnB hosts in my area, but I assumed many wouldn’t want to give up that info as a reliable cleaner is gold to a short term rental host. However, most AirBnbs in the area are duplexes where the owner lives on one floor and rents out the other floor. They also often did their own cleaning so there was a chance they might want a side job, especially if the person was not employed, retired or working part-time.

One AirBnb host mentioned in his profile that he also manages other people’s properties. I spoke with him and he agreed to manage my property as well. Since he has taken over, a huge burden has been lifted from my shoulders as he has been great at taking care of issues. And there have been issues! However, things have calmed down and have been running smoothly. Things are going so well that I’ve even contemplating buying another property to rent as a short term rental!

FI Can’t Wait

First Day of School

First Day of School

About seven years ago, I found the blog Early Retirement Extreme and I was intrigued. Jacob, the writer behind the blog, is a bit extreme in his approach so I didn’t see myself following in his footsteps. Soon after that, I discovered Mr. Money Mustache, and his lifestyle and approach made it more palatable. Many other FIRE blogs followed and it seemed that they had attained this lofty goal. I was hooked and started to question: why not us?

The “WHY”

When I first learned about FIRE, I didn’t have any strong motivation to reach financial independence. Sure, I had a long commute and I didn’t really want to be stuck at the 9-5 job forever, but I didn’t hate my job. After my first son was born, life became much more hectic. With dropping him off and picking him up for child care purposes, I was away from home about 12 hours a day. I didn’t feel like I had much quality time with my family. Things got more hectic when we had our second child.

There are plenty of parents who have even busier and more inflexible schedules than me, so I sometimes feel guilty for complaining. However, seeing those who have attained FIRE has inspired me to want more out of life. Back in June, my first born graduated from preschool. He started kindergarten yesterday. After committing almost seven years to this FIRE journey, I still don’t see the goal on the horizon. There are still too many variables involved. How much will our expenses be with growing children? What will we do for health insurance/dental insurance? Also, we live in an high cost of living area making it extra difficult. Yes, that is by choice, but it would be also difficult leaving all our family and friends.

The Slap in the Face

As I mentioned above, I don’t hate my job. But would I be here if I didn’t need the money: absolutely not. While I can’t quit my job now, I’d be happy if I could have a more flexible schedule, and my position is an excellent fit for a flexible schedule as I mainly sit at my desk researching and writing. I don’t deal with the public and rarely have to meet or speak with colleagues. There is no reason not to allow telecommuting or flexible schedules. Also, while I may be biased, I do believe I have been a highly productive employee over the decade that I have been here. Many employers are shifting towards allowing flexible schedules as well as a work from home option. The governmental organization I work for has been pretty flexible with alternate work schedule in the past. Unfortunately, this governmental organization has decided to go against the grain and disallow most requests for flexible work schedules.

A month ago, I submitted a request for an alternate work schedule. Since my older son was starting kindergarten and my younger son was starting daycare, pick up and drop off was going to be a little challenging. I asked to work from 8:30 until 4:30, instead of the usual 9:00 until 5:00. With my long commute, leaving early would allow me to beat some of the traffic and get back in time to pick up my kids. Honestly, even if I wasn’t trying to get home earlier to pick up my kids, this schedule would save me a lot of unnecessary time wasted in traffic. I would be working the same amount of hours so no big deal right? My request was DENIED. And to pour salt on the wound, they couldn’t even spell my name correctly on the denial letter.

Sure, this really isn’t that big of a slap in the face. Plenty of others deal with a lot more B.S with their employer. I think having some F-You money stored away and having read others who have attained FIRE makes it even more difficult to deal with work stupidity. Sure, I would have loved to have said, “so you’re denying my request…I’m out!” However, I’m not ready to take that leap. Plus, I have a pension and it is a pretty strong pair of golden handcuffs which makes it even harder to leave. So I’m not planning on leaving, but I am focused on getting to FIRE quicker.

The “HOW”

For the first leg of my FIRE journey, I was focused on maxing out my deferred compensation plan and Roth IRA, entrusting the index funds I had to do the heavy lifting. I remain a big proponent of this strategy, but feel that it will take a lot longer to attain FIRE going this route being that I choose to remain in a high cost of living area. Maybe I’ve been bitten by the real estate bug, but I believe that using leverage will help me arrive at my goal quicker. It may be a little risker, but I’m willing to take on that added risk.

Sure, things didn’t go as planned with my latest real estate venture, but I remain undeterred. I don’t look at it as a failure, but as a learning experience. Also, while things didn’t go as planned, it wasn’t a disaster financially and things have stabilized. I plan on pushing forward investing in real estate and hope to share those plans in future blog posts.

Lessons Learned Investing in Real Estate Long Distance

Credit: freedigitalphotos.net

Credit: freedigitalphotos.net

With my rental property in Kansas City, I have had a great experience working with the property manager I found who is handling the day-to-day operations. Maybe after my positive experience with that long distance rental investment, I became a little too overconfident that I could easily replicate my success. There were a few differences in my approach in finding the property manager which might be the reason for the different results. There are also a few things that I’ve learned with my last experience.

References

I found both property managers on the Biggerpockets.com forum. It is a great resource, but anybody can sign on and participate in the forums. With the property manager in Kansas City, he was a pretty established member of the forums and provided good advice. A few of the other members would point to him as an expert and others also mentioned that they used his property management services and had a good experience. I contacted members who had used his property management services and asked them to give me more details about how they found their experience. With my AirBnb experiment, the property manager was a relatively new member and I couldn’t find anyone who had worked with him in the past. He seemed very knowledgeable and had a pretty strong resume, so I took a leap of faith. I made a mistake. References are very important. It’s important to hear positive recommendations from investors who have dealt with the property manager or provider in the past.

Trust and Integrity

In my previous post, I explained why I think owning an AirBnb investment property can be very profitable. I still believe that to be the case. The numbers reflect that. However, numbers don’t mean a thing if you have a horrible person running the show. When I read real estate investing forums, I see a lot of people really focusing on whether an investment is a good deal based on the numbers. Yes, this analysis is very important. However, what is more important is to have someone with integrity and that you trust on your side. It doesn’t matter how good the numbers are, a bad manager can screw up that deal. Having a good team in place is more important than the deal.

Back up plan

“If you don’t have a back up plan, you don’t have a plan.” Things don’t often go as planned. You need to make sure that you have multiple exit strategies so that you’re not stuck with the original failed plan. I knew there was some risk involved putting a lot of my trust in this property manager and also with short term rentals in general. The numbers were enticing enough for me to give it a shot, but I made sure I had back up plans. I had contact information for other property managers who could take over if things went sour with my first manager. The property would cash flow as a long term rental too, so I could always convert it to that. Although, I’d have to figure out what to do with the furniture. I could rent it as a furnished rental, however, in this case, I think the demand would be pretty low. Finally, I had a family member who lived nearby the property who I could trust.