🏘️ Buying a house? Read this

Yes. This is the City Chad, your money and lifestyle pirate, about to reveal the secrets of unlimited living. Let's unlock the treasure chest!

In this week’s edition:

• Market Review: ⬅️ Pullback

• Chad of the Week: 💻 Pieter Levels

• Article: 🏘️ Buying a house? Read this

• News: 💪Working Out is Racist

• Power Move: 🧵 Threads

Follow Us: Instagram, Twitter, Facebook, LinkedIn and now Threads!

MARKET REVIEW: ⬅️ PULLBACK

Greetings Chads and Chadettes! Welcome to another edition of City Chad.

Last week we saw most asset classes pull back from their recent phenomenal run.

While inflation is cooling down in the US, and the economy is so far dodging a recession, “the vibes” are a little off.

This is normal when things seem to only be going up. We shall see what the second half of this year has in store for us.

Crypto also saw a slight pullback.

However, there was some very bullish news coming from Standard Chartered. The bank predicted a price of $120K for Bitcoin in 2024. Basically a 4X from today’s prices.

Seems quite optimistic, but it’s crypto and anything can happen (just ask your uncle who longed BTC at $69K and sold at $13K).

CHAD OF THE WEEK: 💻 PIETER LEVELS

This week the title of Chad goes to Pieter Levels.

I’m excited to share his story as I consider him one of the coolest solopreneurs ever. He’s been featured on the My First Million podcast, in one of their most popular episodes.

He is perhaps considered the gold standard for those who want to build a company without the hassle of managing employees.

Oh, and he makes $2.7m a year doing so.

Do you need some inspiration? Keep reading to know who he did this.

How it Happened

A self-taught developer, Pietr has mastered the art of working while travelling as he pleases without neglecting the 5 companies (and projects) he runs. Yes, five!

Just hearing that sounds overwhelming. So, how did he do all this?

As any good entrepreneur he saw a necessity and provided a solution. He made Nomad List, a website that ranks cities worldwide as desirable places for remote workers to live and work. With this he was able to establish a community that gave him a jump start.

The website also has a blog where Pieter shares his thoughts on travelling and working remotely as a digital nomad.

How He Grew His Audience

That’s a good idea and all but that would be nothing with no marketing or eyeballs on your work.

Part of Pieter's success has been his intentional marketing techniques. He focused on growing one area at a time, first building a community organically and then expanding into outreach.

By already compiling a loyal following, he was able to secure profit.

Why He’s a Chad

What in my opinion makes him a Chad is, first, his motivation to get out of the traditional workforce on his own terms and being creative about it.

And second, the fact that he did it by creating a company that would not only help him accomplish this, but others like him as well (e.g. Nomad List).

Pieter Levels is a visionary and an inspiration to those who want to be entrepreneurs without having to raise VC money, be a slave to an office and the expectations of others.

Total Chad.

ARTICLE: 🏘️ BUYING A HOUSE, A NO-BRAINER?

TLDR: Buying a house seems to be the no-brainer choice for those who can. At least that’s what mom and pop say. But maybe it’s time to question that assumption.

Owning a house comes with a lot of headaches compared to renting. And it also is putting a lot of eggs in one basket. Are you wondering if you should take that leap?

Find out what are the contrarian thoughts on buying a house and if those apply to you.

Some things you’ll learn here:

• Common Assumptions about buying Real Estate

• Hidden costs of buying

• How to assess if it is a good idea for you

Intro

If you asked any Boomer if they regret buying a house back in the 90’s, you’ll probably be laughed out of the room. Of course it made sense, and most who did are laughing all the way to the bank.

But does it always make sense, now that interest rates are much higher than before, and that prices are so high?

The average person you meet would probably think that buying is the thing to do. I mean “why are you burning money on rent, you idiot?”.

However, doing the actual calculations to know what actually benefits you is the part that is often overlooked or misunderstood.

So let’s dive into some of the common knowledge around Real Estate and see if it passes the Chad test.

“If the Mortgage Payment is less than Rent, then Buying is better”

This is not a bad way to look at it but is not the full picture. It doesn’t consider things like property taxes, fees and maintenance costs. Those things add quickly and are unrecoverable, just like rent. What you should really be looking for is the total cost of owning vs renting.

Oh and that includes the interest you are paying, which brings us to the next point…

“Renting is burning your money away”

Yes, when you rent that money is gone. It is not an investment but an expense. But when you buy, you also have to look at the money you are “burning away” as interest (on top of the other expenses we mentioned before).

Your mortgage payment consists of two components: interest and principal.

The interest is the unrecoverable cost here since it’s the cost of borrowing money, whereas the principal payment can be recovered when selling the house. So what you should really look at is the total cost including the interest you are paying, which goes to the bank.

When you add it all up, you may be surprised at how small the difference is compared to renting.

“Buying is always a good long term investment”

A lot of people love the idea of buying a house. It’s not just a financial decision but a psychological one. They picture Junior running in the back yard and thinking of their home as their castle.

Fair enough.

But that dream always becomes more appealing when people assume that they will also make money when it comes to selling their home. That’s not been a bad assumption over the long term, but it’s not a guarantee.

History is full of examples when things have not panned out as home buyers wished. Look at the real estate bubble in Japan in the 80’s, the 2008 US housing market crash for examples.

You see, buying a house normally involves getting a mortgage, which is a type of “leveraged investment”. Meaning that you are using money that is not yours to buy an asset (in this case, a home). This magnifies your gains when prices go up, but also your losses if prices go down.

This is usually a no-no for most (beginner) investors in other asset classes (e.g. stocks) but the norm when it comes to real estate.

Having your eyes open when it comes to that risk is something you must keep in mind, because it is not a guarantee that real estate prices will always go up.

“Can’t beat investing in bricks and mortar”

Yes, investing in real estate has historically and generally been a good long term move, as we have said before.

But there is also an opportunity cost you have to be aware of.

When you are putting money down for a deposit on a house, you are also avoiding investing in other things, like stocks, which have outperformed real estate.

According to economist, Peter Earle “Stocks have returned, on average, about 8% to 12% per year while real estate has generated returns of 2% to 4% per year". That’s a big difference.

Now, there are usually tax advantages to owning a home, which we won’t get into, but looking at other investment options apart from just buying a house may be a sensible idea too.

If you are only banking on your home equity as your only investment, it is really putting all your eggs in one basket.

Not the best idea for a Chad.

“Owning a house is the sensible option”

Who likes their landlord? I’d guess most people don’t.

And yes, being the Queen or King of your castle is very appealing. But owning your castle is not always fun and can tie you down.

Renting can give you the freedom of travelling or moving out when you please, and pick the perks of the location that you like most.

There is a value to that, which for any Chad, cannot go unnoticed.

Also, the hassle of buying and then selling a house is a huge drain on your time. What could you be doing with that time instead?

Probably making more money if you read City Chad.

Final Thoughts

You can crunch some numbers, with this online calculator and check out what’s the turning point in which buying becomes more advantageous than renting.

But be sure to check all the assumptions in the calculator, and play around with it.

House prices are not “up only”, so see what happens when you assume a flat or even negative house price trend.

NEWS: 💪 WORKING OUT IS RACIST

Eating healthy? Burning calories? Working out!? If you do any of that you might be a racist and haven’t realized it yet. Well, at least in the opinion of MSNBC.

If you need any more reasons to stay away from the “liberal” media, keep reading.

Recently MSNBC shared in a (now deleted) tweet a pretty crazy post that tries to link online fitness with radical supremacist ideologies.

It even compares martial artists and fitness influences to how the Austrian guy with horrible taste in mustaches tried to appeal to young males.

Backlash didn’t wait as the tweet quickly got about 34M views.

Joe Rogan, Elon Musk, Arnold Schwarzenegger, amongst many others, all jumped in to denounce and make fun of the logic-defying piece of “journalism”.

But why? Why would MSNBC even revamp this post, that was about a year old by the way.

No one will know for certain, but with their biased position towards fitness and tendency to see enemies in every corner it doesn’t surprise me much.

I can’t wait to see their following insightful posts about how smoking and body fat give you superpowers and how diabetes is not a bug but a feature.

I wish this was pure sarcasm, but sadly, it’s not far from reality. We have seen similar articles in the past in other similar outlets glorifying unhealthy lifestyles.

And then we wonder why aliens haven’t contacted us yet.

POWER MOVE: 🧵 THREADS

Billionaire’s Feud

The drama within the tech world continues as the recent feud between Musk and Zuck gets even more heated.

Starting with the launch of Zuckerberg's Threads app, which almost immediately drew criticism from Musk.

The Tesla CEO accused Meta of stealing former Twitter employees, among other things.

Musk has been losing his marbles it seems and has continued his critiques of Zuckerberg and Threads.

Meanwhile, Zuckerberg has been taking more subtle jabs at Musk on Twitter. He posted a meme of two Spider-Men pointing at each other, drawing parallels between Threads and Twitter.

Then Musk tweeted about Zuckerberg being a “cuck” and a challenged him to a "literal d*ck measuring contest."

Yes, you read that right.

The Power Move

Going beyond the feud between billionaires, the Threads app is proving to be a total Power Move for Meta.

So far at least.

It already has over 100m users, and if it keeps growing at this pace it could surpass Twitter in a matter of months.

Its integration with the company's ecosystem allows users to share posts directly from Threads to other platforms like Instagram Stories. Verified Instagram accounts are even automatically verified on Threads.

This puts Threads in a strong position against Twitter, which is currently facing challenges like data scraping and system manipulations.

Threads Bull and Bear Case

Will Threads be a long-term success?

The My First Million Podcast did a great job this week outlining the Bull and Bear case for Threads.

Some of the things they mentioned were:

Bull case:

• Phenomenal user growth due to low friction in acquiring users

• Zuck’s expertise in the social media field

• Twitter’s recent mistakes (such as adding friction by limiting features and embedded tweets)

Bear case: 

• Meta has not had much success in creating its own products (except Facebook) and has grown through great acquisitions (Whatsapp, Instagram)

• The Instagram user base may not care about a Twitter-like product

• User acquisition and growth is not the same as user retention

We will have to wait and see how things pan out. Oh and in the meantime, checkout our Threads account.

💖 SHARE THE LOVE

If you enjoy this content, please share it with those you love. Hit the little button below and the magic will happen:

🧔‍♂️ CHAD MEME

DISCLAIMER

The material on this email and our website is for informational and entertainment purposes only and we make no guarantees as to the accuracy or completeness of its content – it is subject to change. Please conduct your own due diligence and research.

None of this information is financial advice, and you should consult your financial advisor before making any investment decisions. Your capital is at risk and you may lose more than you initially invested. We do not provide any offer or solicitation to buy or sell any investment products, nor does this constitute an offer to provide investment advisory services.

The Chad index (“the index”) is a combination of historical returns for the following assets:

Equities: Vanguard FTSE All-World UCITS ETF USD Acc
Fixed Income: iShares Core Gl Aggregate Bd UCITS ETF USD Hgd Acc
Real Estate: iShares Developed Markets Property Yield UCITS ETF USD (Acc)
Gold: Gold Bullion Securities Limited
Ethereum
Bitcoin

The index is rebalanced quarterly to the target weights shown in the table. The target weights are subject to change. The index does not represent the performance of a real portfolio and does not imply a recommendation to invest in any of those assets. Past performance is not an indication of future performance.