We have some cash right now, and it’s hard to know what to do with it. 

 

As someone who identifies as an "investor," sitting on cash feels lazy, like doing nothing. But it's not all bad – it's earning 3.6% in a Vanguard Cash Plus Account, which is nothing to sneeze at.

 

 

 

So, if you have some cash, put it in a money market fund now. I like Vanguard, but there are plenty of options.

 

I read that speculation bubbles – i.e., when people start looking for returns, largely in high-risk assets (like crypto or weed ventures) – happen when rates drop below 3%. Once people see a "2" in front of their returns, they can’t help but start investing in stupid stuff. Our capitalist culture demands we grow our money.

 

 

I did think about putting more money into the stock market, but no. We already max out our 401k and pensions annually, and our kids' 529 accounts and IRA's are invested in target date index funds.

 

So, I considered putting our cash into a general brokerage account, but something's telling me to just leave it.

 

I’m not a market timer, but the stock market is stupid expensive right now. By any measure, it's the most overvalued in history, higher than 2007 and even 1929. Not saying there’s a crash coming, but maybe I’ll try to be smart and buy the dip.

 

What's actually well priced these days seems to be real estate.

 

 

One of my partners just bought a building without me. We own five buildings together, but he found this one on his own and pulled the trigger. I was hurt he didn’t call me first, but it’s fine, it’s an open relationship.

 

The building is a good one. Mid-City, $2mil for $16K/month in rents, 8 units, all two-bedrooms. This same building was $2.8mil three years ago. I know because we bought one together in 2022.

 

Sounds good, but prices of multifamily investment properties have gone down for a reason. Insurance can go to $15K a year, tenants can stop paying and stay for years, repairs costs have tripled since 2020. He’s understandably cautious: "I ran the numbers hard. No more Jesus take the wheel on these things."

 

Have to be careful these days. I've always said about real estate, that none of this is hard. Think of all the landlords you've paid rent to. Did they seem, on the whole, like very smart people? Didn't think so. But it's getting harder than it used to be.

 

And I don’t feel too bad, because as I’ve said before, Lori and I are not buying apartments anymore, just commercial and houses. Preferably, luxury houses in luxury areas.

 

 

Which brings me to our news, which is we bought a beach house in Newport (not on the beach, one block off) a couple of months ago, which cost about as much as our current house is worth, and is now my biggest monthly expense by a mile. And now I’m neck deep in YET ANOTHER home renovation, which I'll discuss next week.

 

We definitely let Jesus take the wheel on this one. It was an impulse buy BUT the numbers feel safe.

 

It’s not a second home; it’s a rental property, despite some of Lori’s renovation decisions that appear decidedly “owner-user.” It can be rented for $25,000/mo in peak season, so it pencils. And we can squeeze in some visits. And it’s an A++ area. 

 

 

I feel like it was a solid move – it’s a beach house but not a second home community, and will likely end up out-appreciating our house in Los Feliz. And we could retire down there?

 

Maybe. I turned 51 this week so those kinds of things are more on my mind.

 

So, in the end, we're sitting on cash and buying real estate. Good real estate. Which I think is always the right move: doing something and owning something good beats sitting on the sidelines no matter what, and a real asset in our name beats a money market account every time.