Emergencies Happen

March 1, 2021 | Grow your money

Right now I am 33 years old and I have lived my entire life in Texas a part from a few year away in college. And never have I experienced a situation where something can go so bad so quickly. As the temperature and snow dropped my house lost power in the middle of the night.

The situation quickly became an emergency because the temperature inside the house was almost as low as the outside of the house. It was really like a scene out the 1800’s: candlelight, blankets and the fire going while reading books. In the backyard there was a day and a half worth of firewood, which I slowly burned through. At about hour 30 I decided that the temperature was going to continue to drop and I needed to leave the house and take my dog somewhere that had power.

I was nervous about leaving the house because the roads were snowy and icy and I hate driving in wintery conditions because I have had too many close calls in the past.

It took about 3 1/2 days for the power in the house to be restored, I think, I lost count after a while. When I got back they told everyone you could not drink the water because the power to the water treatment plant how been compromised, everyone needed to boil water.

This is not the first ‘emergency’ I have experienced in my life. Everyone goes through physical and emotional emergencies at different points in time. And for a long time I felt like I did not need an emergency fund, until the day I went through a true emergency.

We all need an emergency fund.

This is one of primary functions of money. To heat your house in winter, buy food at the grocery store, buy clothes to wear and pay for medical bills in order to stay alive. We all need money to pay for the basic necessities of life.

If you currently do not have an emergency fund that should be your first priority. Set aside money to pay for any unexpected expenses. Creating this bundle of money does not happen overnight. It may even take a year or several years to put aside enough money to survive for several months if you lost your job or there is a big unexpected medical expense.

But having an fully funded emergency will create a huge piece of mind. It will allow to take more risks. The best part is that it will create a foundation to build massive wealth.

My motto is: Always Be Investing. Through warm and cold, good and bad you always want to keep adding to your financial position.

I remember the first time that I read Rich Dad, Poor Dad. It is not best piece of literature or it is not my favorite book, but it does make you think differently. That is what I love learning something completely new that I never knew before and changes how I see the world. This is why I enjoy research stocks. Learning about new companies and how they make money and solve customer problems. There are so many different ways to create a business and become successful.

You could start a grocery store or a fast food restaurant or you could create a company that makes vaccines or provides fun video games. There are so many creative ways to make money. And everyone does things a little different so it is interesting to learn about the differences.

Rich Dad, Poor dad teaches people to think differently about money. Debt is not bad. Every dollar should be your employee, working hard for you and earning you more money. The more money that you have working for you, the more freedom you gain.

Freedom is priceless.

Money may not bring you happiness, but it does give you lots of options.

What is happening the world?

  • President Biden is still pushing for a new stimulus bill.

  • People are getting vaccinated and the J&J vaccine is being approved.

  • Winter and Covid are keeping people in doors.

  • Airlines are still bleeding money.

  • Hopes for travel/tourism in 2021 are fading

  • Interest rates remain low, but bond yields are rising driving down tech stocks

Indoor Economy Stock Benefactors

The pandemic continue to rage on and it has changed society.

People are still working from home and even after the pandemic is over it will be more acceptable for people to continue working from home. Salesforce has stated that it will dramatically reduce its commercial real estate footprint. Twitter has already made it known that employees will be able to continue working from home even after the pandemic is over.

More and more businesses will reduce their office footprint. What this means is that the home must now replace the office. The home is now everything from office to gym to restaurant, which presents many business opportunities.

Businesses that cater to providing services to the home have skyrocketed. Here are a few businesses that have benefited from the pandemic business conditions:

  • PTON - Peloton

  • AMZN - Amazon

  • HD - Home Depot

  • NFLX - Netflix

  • ATVI - Activision Blizzard

  • PC Manufacturers

  • ZM - Zoom

  • DASH - DoorDash

  • UBER - Uber

  • ETSY - Etsy

Every company is trying to cater to people living and working from home.

The businesses that are laser focused on delivering their products and services to customers wherever they are located will be in demand for the next decade. Even when lockdowns are over people are still going to be living and working remotely from their office. The trend is not going away.

Software businesses are going to be some of the best performing stocks in the next decade.

Action: Look to invest in stocks that cater to home consumers and that facilitate working from home.

The Mixed Bag of Real Estate

The home has taken center stage and housing is in higher demand than ever. Demand is so high that prices of supplies has risen while supplies are shrunk and been delayed. I am talking about lumber. Forest fires combined with high demand and supply chain disruptions has led to delays.

Interest rates are low and will continue to be low for years to come. When interest rates are low people can borrow money for cheap. This leads combined with lockdowns has increased demand for high quality homes outside the city center. A generation of buyers are going to be priced out of the market and going to stay renters for longer.

Now let’s talk about the other side of real estate. Commercial

Commercial real estate demand is at all time lows. We already talked about Salesforce reducing their real estate footprint.

Other tech companies are still betting that corporate campuses are going to be vital to the future. Amazon still plans to build a massive, state-of-the-art campus in Arlington, Virginia dubbed HQ2. American Airlines finished building a massive new headquarters, right before the pandemic struck. But those are the big boys, what about all those New York office buildings and outdated shopping malls?

More and more retails stores are closing.

More and more people can and will continue to work from home.

Commercial real estate is going to need to evolve. More coworking spaces. Less large office buildings. More employee focused intentional real estate.

Real estate has become less about square footage and more about events. Businesses are going to have to give customers a reason to frequent their establishment in the future.

Where there is struggle, there is opportunity.

There are some bright spots in commercial real estate.

Warehouses have become more important than ever. Every retailer must now have an online presence and logistics to ship their products to customer’s doorsteps. REITs that provide warehouse space to business are going to become more in demand.

REITs focused on healthcare will also continue to be in demand. The population of the United States is aging and more and more humans will need long term health care. Through hospitals and retirement communities.

Data centers

One of the stocks that I recently bought into is called Switch - SWCH. They are a business focused on creating state of the art data centers for cloud computing. More and more businesses are going to need secure data storage. And this business is on the cutting edge of this technology.

The cloud is now and will continue to be in demand.

Health care

A big part of health care that is rarely talked about is real estate. It is a massive part of the economy:

  • Hospitals

  • Retirement communities

  • Nursing homes

  • Doctors offices

  • Pharmacies

They all must have a physical space where they can do their work. This cannot be outsourced or reduced. And it still a fact that the American and developed world populations are getting older.

Action: If you are going to invest in real estate choose a REIT that focuses on the bright spots: warehouses, data centers, healthcare etc.

You Don’t Need Emerging Markets

People constantly talk about diversification.

“You need to diversify with Gold and international markets.”

No, you do not.

You do not need international markets. You actually need more concentration in high quality assets.

U.S. businesses like Coca-Cola, GM, Apple; they all operate internationally. Most fortune 500 companies get the bulk of their earnings from overseas markets, so as an investor in Coca-Cola you have exposure to emerging markets.

U.S. businesses are growing faster than emerging markets, because they U.S. has the best business market in the world. Did you know that the United States makes up more than 50% of the entire world’s market cap.

China is growing fast and new businesses are coming online there everyday, but their financial reporting is hazing and no one trusts the Chinese government. It will take a generation before global investors fully embrace the Chinese markets.

The best place to invest is still in the United States. Part of the reason for this is that international businesses want to be listed on the US stock exchanges like Alibaba - BABA because there is more investment dollar here than anywhere else.

We talk a lot about focus here at Harness Money. Because in order to become an expert you need to focus on being great at just one thing and the same is true of money. In order to get great financial returns your money needs to be focused.

Action: Skip investing overseas and focus on investing in the best that America has to offer.

The Perfect portfolio

Your portfolio should be tailored to you. You are unique. A certain age, job, career, spouse.

All of those factors should go into consideration when building a portfolio.

Do you need insurance if you are young and single? Probably not. Do you need insurance if you are the family breadwinner and you have 2 children to support? I would argue yes.

How old are you? If you are reaching retirement you might want to craft a less risky portfolio.

The key to investing is to start young. If you start early enough and stay the course you may grow your portfolio large enough that you never need to change your allocations.

Generally as people reach the age of retirement they move money from stocks into bonds, because bonds are more secure and offer a stream of income. But the growth of bonds is much lower.

If you went to a financial advisor they would most likely try and “diversify” you into different index funds. A S&P500 fund, a small cap fund, an international fund and an international fund.

According to Warren Buffett, the average American just needs to buy and hold an S&P500Fund. No international, no bonds, no small caps. One index fund is enough diversification.

Action: Do a yearly review of your portfolio make adjustments for any life changes.


For the longest time, I avoided gaming stocks, because their share prices did not move much and the field is not in my circle of competence.

The gaming space is a tough one. There is a lot of competition.

The main gaming console stocks:

  • XBox - MSFT - Microsoft

  • Playstation - Sony

  • Nintendo - NTDOY

  • iPhone - AAPL - Apple

  • Android - Samsung

There is not doubt that more people that more than ever people are staying home playing video games. It is a way to have human interaction without the risk of getting sick. The console providers have definitely benefited from selling more units.

What about the game providers?

  • Glu mobile - GLUU

  • Activision Blizzard - ATVI

  • Zynga - ZNGA

  • Take Two Entertainment - TTWO

  • Tencent

  • Sea

  • UbiSoft

Another way to invest in Gaming is through. Facebook. Facebook is invested in gaming sells the Oculus for virtual reality.

As younger generations get older they will continue to play games into adulthood and will play with their children. More and more games are being produced. More and more people will adopt games.

Action: Rather than invest in a single gaming stock whose fate can rise and fall on the latest game release, invest in a gaming ETF: GAMR or HERO or ESPO

China Investing

Surprisingly China’s economy actually grew slightly in 2020. This is because of the harsh lockdown measures they implemented in some regions of the country, while they allowed other regions to remain open and active.

I started following businesses in China when Alibaba launched their IPO.

There is no need to invest in China if you do not want to. There are plenty of great American businesses. But no one can deny the size of the Chinese economy. It is growing quickly. Chinese has the world’s fastest growing middle class.

1.4 Billion people and growing now that they have eliminated the 1 child policy. The population of China alone is 4 times greater than America.

There are real concerns about how China treats its citizens and controls intellectual property. Many tech businesses choose not to operate in China, because of privacy concerns. Google, Facebook, Twitter.

But this also presents an opportunity for investors. Since many global businesses choose not to operate in China this means that Chinese businesses must be developed to take the place of the Google’s and Facebook’s of the world.

Another factor that cannot be ignored is that the Chinese government indirectly wants new businesses to succeed so they are willing to make cheap loans to smaller businesses trying to grow.

A business still needs to be well run, but more cash means less risk.

One of my favorite businesses that I believe is still undervalued is:

  • BABA - Alibaba

Probably the largest business in China and globally they provide a tech platform to connect manufacturers and sellers.

I also like:

  • KC - Kingsoft Cloud

  • NIO

  • BIDU

There are so many Chinese customers that these businesses can become massive in the Chinese market and then expanding into international markets. This is called scale. If you are a younger investor you always want to think about scaling your portfolio up. Going from $10,000 to $100,000 and beyond.

One of the main ways to scale your portfolio is invest in a young company and hold for the long term. Think about investing in Coca Cola and Wal-Mart 30 years ago. What would that investment be worth today?

This is how I look at China. A lot of these companies like Kingsoft Cloud are younger and growing rapidly. The earlier you can get in on something good the more you can make in the long run. China is a long term game. It will decades before their economy is fully developed and these businesses have matured. And we can get in on the ground floor.

Keep looking for opportunities. There will be many more young and hungry companies that come online in China in the coming decades. Look for new IPOs and other businesses that are looking to scale and meet the needs of the Chinese market.

Action: Watch for new opportunities.
BUY - Alibaba - BABA
BUY - Kingsoft Cloud - KC

Israel Investing

Israel is a complicated country. One of the only democracies located in the middle east and bordered by Palestine to the east. The country has a small population, but lots of business down is in the country thanks in part due to the relationship with the United States and other European nations.

Israel has a thriving technology sector. Most notable the Waze App came from Israel and was purchased by Google in 2013. Cathie Wood’s ARK business has an Israel index fund and more and more Israel ETFs are being created daily.

There are many reasons that Israel has a thriving tech sector one reason has to do with the military. Israel has put a lot of money into developing technology used to keep itself safe against its enemies. They purchase lots of military products from the US and they develop a lot of technology on their own.

Israel is a totally international country. Because their population is relatively small they must outsource their products in order to make them successful.

When you hear about Isreal in the news do not forget about the businesses are run out of Tel Aviv.

My Favorite Investing Platform

Right now is the best time in human history to be an investor. Children being born right now have a better chance to build wealth than any generation before.


Because of investing technology and the lowest costs ever.

In the past month we have all hear a lot about Robinhood. They are really taking a beating in the media and with users. But I must give credit where credit is due.

Robinhood changed the game. Without them, the big banks would never have lowered their consumer trading fees. And lower fees means that more people can invest in the market and become owners.

This is how you close the wealth gap. You get more lower income people invested in the market for the long term.

Does Robinhood have problems? Yes. But I think think they have done more good than harm. And luckily there are other investing platforms out there that are trying to beat Robinhood and make even better produces for their consumers.

It is really important to choose the right investment platform. Because you will be using this platform for a long time, hopefully decades.

Roboadvisors are really popular.

You give them your money and they invest it for based on your life situation. And then they take a fee for doing the work for you.

I don’t like fees. I want the lowest fees possible. So I avoid roboadvisors. But this means that I have to do the investment work myself.

This is why my favorite investing platform is M1 Finance. I am not getting paid by any of these platforms, just sharing my opinion. Because there are no fees to invest and the software is really user friendly.

You create a “pie” of investments and then as you add money it is added to your pie.

M1 Also offer a bank account and a line of credit if you were to ever need it.

I do not care what investing platform you choose, but keep in mind that you are going to be using it for a long so it needs to be easy to use. It also needs to have all of the features and functionality that make it easy to invest regularly.

Action: Figure out which investment platform works best for you and then go all in with it.

Harness Money Wrap Up

Emergencies happen when you least expect them.

Another round of stimulus money is on the horizon.

This is likely to be the last stimulus that consumers receive before the population is fully vaccinated. Plan out carefully what you are going to do with your check. Pay down debt? Invest? Pay rent? Buy groceries?

This is a theme of money, if you are not mindful about your money that it will disappear and you will not know where it went.

Prepare for emergencies before they happen. Create and fund an emergency fund for all of your life expenses: food, health, rent, bills. A fully funded emergency account takes time so start as early as possible. Then you will be ready when a winter storm hits or you have an unexpected health emergency.

Action Steps

  • Look to invest in stocks that cater to home consumers and that facilitate working from home.

  • If you are going to invest in real estate choose a REIT that focuses on the bright spots: warehouses, data centers, healthcare etc.

  • Invest in the ETF: GAMR

  • Invest in China
    BUY - Alibaba - BABA
    BUY - Kingsoft Cloud - KC

  • Figure out which investment platform works best for you and then go all in with it.