Hello everyone! I’ve been a long-time lurker here since I discovered FIRE back in 2014, but I’ve rarely posted. I hit $1 million earlier this year, and I wanted to share my story and hopefully exchange some valuable insights with you. It has taken me a while to work up the courage to share, but here goes. I’ll try to keep it fairly short and simple, although I apologize in advance for the long Background section, and I’ll follow up with more details as they come up in the discussion.
TL;DR: I’m 34, single, watch collector, no children (and don’t plan on having any if I can help it). My NW reached ~$1 million at the end of August 2020. I increased my liquid net worth from zero to $850,000 in 6.5 years, and I aim to reach my FI number of $2.5 million by age 41. I don’t hate my job, but I do hate that it keeps me from staying fit and active, so the sooner I become FI the better. Look at my charts. Ask me questions or for more charts. Thank you for reading!
Background
I grew up middle class in a developing country (Middle East) as an only child. I was privileged to have parents who were more than willing to forego most pleasures in life—including travel, nicer cars, etc.—and to instead spend every penny they had to make sure I received the best education possible. They put me in a private American school and paid for my college education, but they also were not the absolute savviest with money.
My health and education came first for my parents, but what came a very close second was every little whim and desire I had as a child—they spoiled me. They almost never invested, and instead spent all their extra money on whatever clothes, computers, videogames, music CDs, cameras or extra pocket money I wanted as a teenager. They found it very hard to say no to me. Because of this I grew up not knowing or appreciating the value of money, and by the time they (involuntarily) retired in their 50s they had virtually no savings.
What’s done is done, right? By the time I woke up to all this in 2013, I was 26 years old and armed with a pretty good education, but I hadn’t exactly been all that successful since graduating in 2008. I had gotten my CPA back in 2009 and was working at a public accounting firm making a measly $12,000/year (yes, that low, because developing country).
I hated my job, mainly because of the people I worked with, but I won’t get into that in any great detail. There was just a big gap between the way I had learned to work in a private/American education and the way I had to work ‘out in the real world’. I also had not been promoted in several years because I was seen by my peers and supervisors as a poor team player.
Anyway, in early 2014, everything changed! Thanks to the way my education and career start looked on paper—and thanks to LinkedIn Premium which I was (and still am) paying $30/month for—I was headhunted for a financial controller position in an east African country. This of course meant leaving my family, my city and my friends, and starting all over. To me this was all very new and scary, but it was almost a complete no-brainer. The move was to propel me from $12,000/year to $75,000/year + all the benefits that come with an expat position.
One thing that made it even easier for me to work abroad was my U.S. citizenship, which I got from my father’s side of my family. Anyway, I packed everything that mattered to me in a few suitcases and got on a one-way flight. My liquid net worth was negative at the time; I had $25,000 worth of credit card debt, plus more owed to my parents. I paid it all off within a few months of moving, but my parents later refused to let me pay them back what they’d contributed for an apartment back in my hometown. The apartment cost about $115,0000 and they’d paid for half of it. I still own it.
Since I made that move in 2014, I have made two more moves to other countries, and I’ve grown to quite enjoy my job and responsibilities. I’ve been promoted three times, and each promotion or move has come with a salary bump. I am now a CFO and my income has steadily climbed from the $75,000 in 2014 to $110,000 now in 2020. In addition to that, I get a ~30% performance-based bonus, and a 6% retirement benefit, plus company-paid housing, furniture, utilities, car, gas, internet, phone, house help, gardener, and two flight tickets home per year.
I’m fairly happy with how I’ve done over the past 6 years, but I look back and I still think to myself: What if I hadn’t been so spoiled? What if I’d learned the value of money earlier in life? What if I’d saved my money and started investing at the age of 21 instead of 27? Where would I be now?
Current financial position
I have an insane Excel spread sheet I’ve been developing and using for the last 6 years. I track every dollar I make or spend, every stock I buy, and hundreds of metrics. I do it religiously, and it’s made it very easy to pull numbers out to share with you guys.
In this chart, my total net worth over time is in orange, and my liquid net worth is in black. The green line is my stock portfolio.
This table breaks down my current net worth near the end of 2020 and each of the previous 6 years. I’ve kept things pretty simple and my stocks are split between two individual accounts with two brokerages—there’s no 401k or IRA of any kind. As a U.S. citizen with no home base in the U.S., I get to exclude much of my income under the FEIE rule, but it also means I can’t contribute anything to a tax-advantaged account.
EDIT: Several of you have pointed out an error I've made in the original chart and table. I erroneously included in my illiquid net worth (from 2014 to 2016) a separate property that my parents owned until 2016. I was tracking the value of that property in my spreadsheet before it was sold in 2016, but it was never a part of my own net worth and it shouldn't have made its way into the table and chart.
I've updated the table and chart. Thanks for pointing out this error!
These are currently my 6 largest stock positions:

Stock	% Gain	Value
TSLA	+411%	$ 100,400
NFLX	+43%	$ 79,800
AAPL	+51%	$ 77,000
FB	+281%	$ 61,200
AMZN	+104%	$ 48,100
MSFT	+62%	$ 39,300

This chart shows my income and how much of it I have spent/saved since 2014. I had a particularly low savings rate in 2016 and 2017 because in those years I pursued (and paid mostly out of pocket for) an expensive top 20 MBA degree. I find out more and more every day that this degree is (and will probably continue to be) completely useless to me, and that the ~$85,000 I spent on it would have been much better invested in the market. My CPA is what I need for my job, and my company never cared whether I got an MBA degree.
You can also see evidence of a fair amount of lifestyle creep between 2018 and 2020 in the chart below. In some years I travelled more than others, but generally my living expenses now hover around the $25,000/year mark.
I’ve also been very fortunate to have invested during the recent insane bull run, and this chart shows just how much it has helped my net worth over the last couple of years.
You can see in the chart that as of now near the end of 2020, I have invested a total of $300,000 into the stock market, and my portfolio’s estimated value at 12/31/2020 is $680,600. This makes for a total return of 121%, and I’ve calculated an annualized return of over 50% based on the timings of each of my deposits into the brokerage account.
The way forward
I feel that I’ve had a great deal of success over the past years, and I attribute most of it to a great ability to save thanks to the way my compensation has been structured and the FEIE. I do, however, recognize that the current market conditions which have allowed my net worth to climb as rapidly as I show in the table below will not necessarily last.

Year	Net Worth
2014	248,300
2015	309,400	+25%
2016	252,600	-18%*
2017	379,700	+50%
2018	457,100	+20%
2019	676,000	+48%
2020	1,071,000	+58%

*Large decrease in NW due to severe drop in Dollar value of property valued in a foreign currency which suffered severe valuation in that year.
I’ve calculated my FI number at $2,500,000, which I believe would allow me to live comfortably and be able to spend up to $80,000/year in today’s dollars, adjusted for inflation. Based on my current and expected future salary, as well as my expected future savings rate. I’ve also calculated that I can likely achieve my FI number at age 41. Some of my assumptions include a 49-year retirement, average inflation of 2.6%, an annual contribution to my investments of $110,000 (adjusted for inflation), pre-retirement market return of 7%, post-retirement market return of 6%, fixed income return of 5.5%, percent in equities is 110-age (so it changes every year), and annual expenses of $80,000, which decline by 2%/year after age 65.
I guess one other thing I'm grateful for is that I'm not stuck in a loop trying (and failing) to get rich quick like I see some of my friends doing. I'm glad I'm taking the slow and steady path, and that I have the patience and discipline for it.
I’m very happy to get into discussions and answer questions. There are many more charts, calculations and concepts I’d love to discuss and share. The only things I do not want to be asked are 1) what countries I’ve lived/worked in, and 2) what companies I’ve worked for. Thanks for understanding.
Thank you all very much for taking the time to read my story, and I’d love to hear your comments!
EDIT 2: Thank you to everyone who has read my post and engaged in a meaningful exchange with me. Whether we agreed or not, I appreciated the discussion. And thank you, strangers, for the wholesome awards!

I dont tackle the wage gap on the part of the earning part as when controlling for the factor there is a 2-6% difference. The main rebuttal of the counter argument is that the hiring/promotion/raise etc is biased (which would explain the lack of women in some field and hight responsability jobs)
I used sources and studies in western countries, not only US due to the lack of studies in US for some toppic)

The Myth of Invisible Barriers

Invisible barriers
Discrimination in STEM tenure track hiring According to many theories, the first difficulty women face is discrimination in entry to the [STEM tenure track] faculties (https://doi.org/10.1073/pnas.1418878112) . In reality, however, women are more likely to be accepted if they have equal qualifications. Practically with a 2:1 ratio. That's a far cry from the 10% gap here. In addition, another other study shows that the same file is rated better on a scale of 1 to 10 if it belongs to a woman. (8.20 versus 7.14). (cf study this2015). To say that women find it more difficult to access STEM tenure track jobs is therefore simply not true, or at least remains to be proven in light of these studies.
Devaluation of women's work in STEM One of the hypotheses put forward is the devaluation of women's work regarding their articles and referencing women academic sciences. To verify this, copies of the same document were sent to the same reviewers with only the name difference. A 2009 study taking a sample of 1031 reviewers shows that there is no significant difference in the rejection rate or quality assessment of the article favouring or disadvantaging women over men. The rejection rates are 25.44% and 26.75% for men and women respectively. However, female reviewers were more severe in their evaluation and rejection of the article regardless of the author's name. (To Name or Not to Name the effect of changing Name). The result is replicated by a number of different studies. [women academic science](https:doi.org/10.1177/1529100614541236). In addition a 2020 study is interested in peer review of articles taking into account three possible sources of bias. Editorial selection of reviewers, reviewer recommendations and editorial decisions (published or unpublished). The data are based on 145 journals in different fields of research, nearly 1.7 million articles and 740,000 reviewers (MainText.pdf). The article observes a very slight advantage for female authors or co-authors over their male counterparts.
Less frequent citation of articles Moreover, according to some, articles are less cited when they come from female authors. However, there does not seem to be a difference in citation between men and women, or even an advantage for women, except in terms of the quality of the document regardless of the author. (women academic science)
Lack of research funding Another obstacle would be the lack of funding, which would deliberately, through an anti-woman bias, prevent women from moving forward. Understanding current causes of women's underrepresentation in science (https://doi.org/10.1073/pnas.1014871108). However, large-scale analyses by the National Science Fundation, National Institute of Health and the US Department of Agriculture Is there a gender Bias inFederal grant program 2004 show no such bias. Furthermore, data from 2006 (from the European Molecular Biology Organisation A persistent problem: traditional gender role hold back female scientists 2007 shows that women are 20% less likely to be successful in applying for funding than men. Applications were made by removing any evidence of gender in the applications. Thus, by sending the applications of 416 women and 475 men, the committee (deciding whether or not to fund), gives the same success rate as when the sex of the applicant is known (20% to the disadvantage of women). The impact coefficient of publications (related to the number of citations) from women who received an "award" was the same as that of men in the same situation. The gender of the candidate therefore does not affect their chances of receiving funding.
A multivariate 2009 meta-analysis based on 21 studies using different meta-analysis methods (fixed effect, random effect, and multilevel effect) on the chances of obtaining funding shows that when taking into account the country and the discipline, there is no statistically significant difference (marsh2009), in fact, the size effect measured is 0.04. Another 2010 study based on nearly 10023 reviews made by 6233 evaluators (external assesor) of 2331 proposals from the social sciences, humanities and scientific disciplines (144 different disciplines). There is a very small difference in proposal success with an effect of d=0.012 due to gender, which is very close to the standard error (SE=0.013). Gender does not have a significant effect on the rating given by the external evaluators. (march2011). In addition, a 2012 study of Australian scientific funding conducted 8,496 research proposals that were evaluated by 18,357 external reviewers through 23,977 reviews. (mutz2012). Proposals by older people are scored higher regardless of gender. In addition, the study shows that there is a statistically significant but very small difference in application approval to the disadvantage of women, which validates the null hypothesis of scoring and decision based on the gender of the applicant. Similar to what was seen above, when there is parity or a greater number of women than men in the assessment group, there are fewer applications accepted. (d=-0.19 small effect size).
Finally, another study conducted in 2018 based on a database of 1.3 million scientific articles, 30 million citations and 71,104 identified authors (Gender issue in fundamental physics: a bibliometric analysis) replicates the studies showing that there is no discrimination in research, whether in terms of hiring, citations or peer review. (artgender.pdf).
Women have no barriers to funding, to the acceptance of their papers (compared to men) and their work is not proportionally less cited than that of men of equal quality in the research world. (STEM, etc)
Difference in academic promotion and salary According to the study Woman academic science there is no significant difference in promotion rates for women except where there are more women (Life Science and Psychology). Moreover, this difference in promotion and salary is explained in part by productivity and field (engineering, biology, etc.).
Overall discrimination in hiring However, it could be argued that women have easier access to universities but are still discriminated against in employment, leading to occupational segregation and thus to the gender wage gap observed earlier. However (CARLSON2011) a 2011 study indicates that in Sweden, one of the most egalitarian countries in Europe, segregation is not due to any discrimination. Indeed, the study indicates that there is no difference in treatment between men and women. Thus, using nearly 3228 applications for 1614 different workspaces located in Stockholm and Gothenburg (workpalce), we observe that women have a response rate of 31% and 29% for men. Whether in a masculinized, neutral or feminized work environment, the number of callbacks for an interview is equivalent. In fact, for a so-called "masculinized" environment (engineer, etc.), the difference in the response rate is 3% against women, 4% in favour of women in "feminized" professions and practically nil otherwise. Thus it seems that the presence of a woman's name on the application only slightly increases the probability of response or is not statistically significant. Supposed discrimination in hiring therefore does not explain occupational segregation in Sweden.
In addition, a 2018 study, having sent 2000 applications (50% women/50% men) indicates that there is indeed a difference in recall between men and women and that women are generally slightly more likely to be called for an interview than men for an equivalent level except in the case of a very high level of competence linked to their marks (except in the financial world where there is no difference) where men receive an average of 16% of responses for an interview as opposed to 9%. According to the same study, the recruiter saw two elements of justification. The first was that showing very high competence was equated with lower friendliness (among women only) and the second with over-qualification for the position in question, which indicates a more positive perception in this case than for men indicating the same level of competence. At this point one could therefore say that the results are mixed, one penalizing competence and the other over-rating it (although the effect is the same). However, the applications are not strictly identical apart from the variable parameters (skills, gender, etc.) because they were not all made on the same dates and do not have exactly the same form. Moreover, a study from the same year indicates that the protocol of the studies comparing the proportion of recall following the submission of applications was not always appropriate, since the applications were not completely independent variables and the estimate of potential discrimination could be artificially inflated by 30%. Thus, the time of sending as well as the number of applications could influence the recruiter. (Simpson's Paradox). Although the study focuses on the protocol of a given study, the protocol is widely used in similar studies to measure discrimination. The study cited above uses this protocol. (see downloads philips2018(1)) and is therefore to be taken with caution. Job segregation is not due to alleged discrimination.
Result of the negotiation Another hypothesis is that women are given less of an increase even when they ask. The answer to this is that even among men there are disparities. This will also depend on the negotiating capacity of each individual and the values put forward by the organization or culture. A 2013 meta-analysis based on 67 studies shows that cognitive abilities and personality traits influence the results of negotiations. (sharma2013). Another [another meta-analysis](https:doi.org/10.1002/job.2357) of 112 studies with a total of 23,016 participants across 30 countries shows a difference in outcome following negotiation. The size effect is d=0.15. However, the values are heterogeneous. More importantly, the negotiating advantage depends greatly on the degree of individualism of the culture in which participants negotiate. For example, when the culture is highly individualistic, men outperform women with a moderate effect (d=0.31). The opposite trend is reversed in a culture with low individualism with a moderate effect size (d=-0.27). Similarly, women outperform men when the assertiveness score is low and intragroup collectivism is high in similar magnitudes. ([email protected])
The result does not show that women are discriminated against but that certain behaviors in one cultural context are rewarded differently in a different culture.
Stickyfloor and Promotion Difference It is observed that women are on average less promoted than men. The situation seems unfair, however this remains an average, like the wage gap, which can be explained by seniority, sector of activity etc.. A 2015 Canadian study involving 5,840 firms, 16,654 women and 24,192 men. The study shows that women have a 2.9% lower wage increase than men for the same promotion(dp9380) in the same company. Moreover, it is observed that women without children have a salary return per promotion and a promotion rate very close to that of men while women with children do not. Moreover, a 2018 study on wage increases for salaried employees (4888 participants) or hourly workers (5148 participants) shows that there is no significant difference between men and women. (artz2018)
There is no difference in increase and promotion all other things being equal.
Glass ceiling and harder judgment Another hypothesis put forward is that of the glass ceiling (rather glass cliff?) that a woman cannot be promoted to high level positions because of discrimination against her. However, according to a [2014 meta-analysis](https:doi.org/10.1037/a0036734) of 111 studies evaluating the skills of a leader, male or female, the difference is minimal (Koch2015), taking all criteria together, we have a d=0.04. For indication, d=0.2 corresponds to a small effect. Moreover, a 2014 meta-analysis of 58 published scientific articles, 30 unpublished dissertations or theses, 5 books and 6 other sources, involving 100,000 people, indicates an overall difference of d=-0.06 in perceived management effectiveness (PEM). Men are assessed as less competent than women for intermediate positions of -0.17 with p<0.05, there is little difference for high positions of 0.04 and low positions of 0.07. Moreover, experienced recruiters have less bias than young students and inexperienced workers. (d=0.04 versus d=0.19). The difference in judgement therefore has a negligible effect, at best a small one. Furthermore, a 2016 study (human-perf) involving 3,367 managers and 9,670 non-managers (731 managers and 1,297 non-managers retained) shows that differences in performance ratings between men and women are again negligible and not statistically significant.
Women are therefore seen as performing and being as competent as men.
Glass ceiling and promotion In addition, a 2013 study of 3,053 and 57,632 managers is looking at the promotion rate of women CEOs in Denmark. (smith2013) Observations were made from 1997 to 2007. For promotions to the position of Vice President, the gross difference is 0.6 percentage points and 1.6 percentage points for the position of CEO. In this particular case, the presence of children seems to be beneficial for men's promotions, but paternity leave is heavily penalized with regard to future career prospects. The domain also explains the difference in the likelihood of being promoted to CEO. Indeed, vice presidents in human resources, IT and R&D are much less likely to be promoted to CEO than vice presidents and CFOs in sales and production. However, vice presidents and senior managers tend to concentrate in human resources positions, which is an important factor explaining the lower promotion rate.
Women are no less promoted to CEO positions than men simply because they are women.
Glass cliff In finding that women could still reach positions of responsibility, it was argued that there was a glass cliff, i.e. women were promoted more easily than men only when the economic situation of the company was difficult. Again, (bech) this assumption is challenged by this 2016 study which takes the case of more than 120 companies in Germany showing that women were not promoted more or less than men depending on the economic situation of the company. This result is replicated with 100 companies in the United Kingdom. In addition, another 2019 study of 121 (civil service orga unit) German women (GROEN) shows a lack of correlation between economic difficulty and the promotion or hiring of more women. Women are not hired or promoted to positions of responsibility when the company is doing badly. Fewer mentors and lower quality of experience A meta-analysis of 40 studies and a conference paper (O'Brien, K. E., Biga, A., Kessler, S. R., & Allen, T. D. (2008). A Meta-Analytic Investigation of Gender Differences in Mentoring. Journal of Management) shows that the difference in access to a mentor is very weakly correlated with the sex of the protégé with r=-0.01 and p not significant. Moreover, there is no difference in career development mentoring. Furthermore, women report having more psychological support than men (r=.01) (r=.06 very low correlation of gender). Men report having served as more mentors than women (r=-0.07), provided more career development (r=-0.04) and less psychological support than women (r=-0.04). However, the results are heterogeneous and the magnitudes are very low.
Women have as much access to mentors as men and get the same quality experience.
Difference in treatment following failure (lower level of evidence due to lack of more reliable sources) A study of about 539 people indicates that there is no significant difference in trust in male or female executives. Moreover, contrary to what is often said, according to a 2012 study of approximately 200 women and 80 men, women leaders are not more blamed for their failures than their male counterparts. (Hmurovic).
Thus they did not receive more penalties in terms of reward, judging effectiveness as well as kindness.
In summary

• Women have no barriers to funding, to the acceptance of their papers (compared to men), and their work is not proportionally less cited than that of men of equal quality in the research community. (STEM, etc)
• Women are not discriminated against in hiring.
• Women are not discriminated against, but certain behaviors in one cultural context are rewarded differently in a different culture (the affirmation is less emphasized in societies with low individualism).
• Women are seen as performing and being as competent as men.
• Women are not promoted less than men simply because they are women, whether in low, medium or even high responsibility positions.
• Women are not more hired or promoted to positions of responsibility when the company is doing badly.
• Contrary to what is often said, according to another study women leaders are not blamed more for their failures than their male counterparts.

More generally, it is assumed that there are invisible barriers that explain the differences in the representation of women in leadership positions without ever questioning or questioning the qualities needed to achieve them. It is true that some barriers were present before but are no longer the same. Few women are CEOs, but also few men. Moreover, according to the study cited above, women have a lower probability of applying for a position than men without being censured. Men therefore try more often on average, make more effort (overtime, etc.) but also fail more and are more inclined to take risks. (See study). It is therefore essential to look at the internal reasons (skills, behavior, etc.) and external reasons (networks, luck, discrimination, etc.) rather than becoming indignant without asking questions and only looking at the result without looking at the causes, taking into account one's strengths and weaknesses, etc. (Cf. study).
One last word before I am subjected to a trial of intent. First of all, I am not saying that it is impossible for discrimination to be non-existent, but that it is marginal and very weak in the professional context (cf. the evaluation of leaders) and therefore that it is necessary to address more the inequalities as a whole and to understand them. Even if this seems obvious, why do wealthy people live on average 4-5 years longer than others, for example? Then I don't make value judgements. A woman and a man have the same "value". Furthermore, I do not consider people who have been successful in any field (professional or not) to be more valuable than someone who has not been "successful". I am in favour of equality of opportunity but not necessarily equality of result.

[Tokyo] IR Senior Staff-Regenerative Medicine x IPS Rapid Growth Bio-Venture-Helios Co., Ltd.
NEW Full-time employee No transfer Scheduled publication period: 2021/1/11 (Monday) to 2021/4/4 (Sunday) Agent service to apply Look Application guidelines How to apply Application Requirements Job Description [Tokyo] IR Senior Staff-Regenerative Medicine x IPS Rapid Growth Bio-Venture- You will be in charge of IR staff in the department responsible for internal and external communication of our company, which is engaged in the research and development of iPS cell-derived drugs, which are expected to grow rapidly in the future. Although it is a small department, it is a position that is the "face" of our company externally. We encourage stakeholders around the world to work with management to deepen their understanding and support. In addition, as the number of bases expands, we ask that you devise ways to communicate appropriately and work together as a company toward major goals. ■ IR business: (1) Support for institutional investors: We will respond according to the attributes and wishes of domestic and foreign investors. A CEO / CFO will accompany you. * Visit North America, Europe, Hong Kong, and Singapore about once a year (2) Participation and planning of IR events in Japan and overseas (3) Timely disclosure-related: Preparation of qualitative information other than financial statements such as financial statements, securities reports, and notices of convocation of general meetings of shareholders / Appropriate judgment of timely disclosure items / Press after coordination with business partners and related departments within the company Creating a release ■ PR (internal and external) operations: (1) Implementation of measures for individual investors, (2) Building relationships with the media, (3) Arrangement of lectures, preparation of presentation materials ■ Other work: (1) Support for the management office of the Board of Directors / Executive Board (separation of duties in this department), (2) Execution of business with an emphasis on cooperation within the management department * There is no problem even if you do not have all the above work experience at this time. You can steadily gain practical experience through OJT with experts with abundant IR experience. ■ Attractiveness of working at our company: ・ You can witness the creation of a new industry called cell medicine / regenerative medicine. In addition, it has a great contribution to society because it has the potential to provide new treatments for diseases for which there is currently no cure. ・ It is an environment where you can feel the management decision-making up close because you are close to the management team. It is also possible to make full use of your language skills, such as when traveling overseas. Also, if you want to improve your English and gain practical experience, there are many opportunities to improve your English, such as creating materials using English and emailing. Target person Graduate school, university graduate or above ■ Required condition: ・ Over 3 years of experience in IR activities (understanding of a series of operations such as announcement of financial results and timely disclosure, experience in creating press releases, etc.) ■ Welcome conditions: ・ Experience as an IR in a similar industry such as the pharmaceutical / medical device industry or a chemical manufacturer (regardless of major or venture company) ・ Work experience using English Requirements: Beginner English Depending on your English proficiency, we may entrust you with overseas conferences and overseas business trips. Work location

Tokyo office 2-4-1 Hamamatsucho, Minato-ku, Tokyo World Trade Center Building 15th floor Measures against second-hand smoke: No smoking indoors Toei Oedo / Toei Asakusa Line / Daimon Station Work location 1: No smoking indoors, smoking space outside the building Nothing Tokyo Yes Working hours 9: 00-18: 00 (Regular working hours: 8 hours 0 minutes) Break time: 60 minutes With or without overtime: Yes Core time: 11: 00-15: 00 Flexible time / 7: 00-11: 00, 15: 00-22: 00 * The average overtime hours for the entire company is around 25 to 30 hours, depending on the season and the amount of work entrusted to us. Employment status Full-time employee Three months Salary 3.72 million yen-5.46 million yen (overtime allowance: Yes) 310,000 yen to 455,000 yen Basic salary: 310,000 yen to 455,000 yen Monthly salary system Yes * Salary will be decided based on experience, ability, and salary of previous job. The estimated annual income is just a guideline and may fluctuate through selection. Monthly salary includes fixed allowance. Treatment / welfare Commuting allowance, health insurance, welfare annuity insurance, employment insurance, workers' accident compensation insurance Commuting allowance: Maximum monthly 50,000 yen Social insurance: Complete with social insurance OJT ■ All employees receive a human dock examination (company burden) ■ There is an employee stock ownership association ■ Has a track record of taking childcare leave before and after childbirth ■ Enrollment of reduced working hours ■ Before the official application, it is possible to set up an opportunity for a casual interview where you can talk about your business (the person who will be your boss will be present after joining the company). Holidays / holidays Complete weekly two-day system (and Saturdays, Sundays, and holidays) Paid leave 10 to 20 days 120 days off Year-end and New Year holidays (12 / 29-1 / 3), summer vacation (3 days), special vacation (condolence, marriage, childbirth), etc. Company Profile View the official business overview page [Tokyo] IR Senior Staff-Regenerative Medicine x IPS Rapid Growth Bio-Venture- Helios Co., Ltd. Apply (agent service) What is "Agent Service"? Completely free * 1 * 1. If we cannot prepare a job that can be introduced other than this case, we will wait for counseling until the job occurs. Please note. Transfer to PC Look anxious Job code 3004568006 Related information Other jobs this company is looking for [Tokyo] IR Expert-Regenerative Medicine x IPS Rapid Growth Bio-Venture-NEW [Kobe] [Regenerative Medicine / Cellular Medicine] Cell Manufacturing Expert-Regenerative Medicine x IPS Rapid Growth Bio-Venture- [Kobe] Non-clinical Research -Regenerative medicine x iPS rapid growth bio-venture- [Kobe] Cell manufacturing expert-Regenerative medicine x iPS rapid growth bio-venture-The deadline is approaching Jobs you have viewed NEW Helios Co., Ltd. [Tokyo] IR Senior Staff-Regenerative Medicine x IPS Rapid Growth Bio ... Work location: Tokyo office east ... Salary example: 3.72 million yen-5.46 million yen.
https://doda.jp/DodaFront/View/JobSearchDetail/j_jid__3004568006/

Good morning
Today we are going to be covering my smallest position, in the small cap Red Violet, who are seeking to take advantage of big data.
Red Violet: Q3 Earnings Review
Red Violet had a fairly average Q3 in terms of growth. Both top and bottom line improved, on quarterly and YTD basis when compared with the previous year, but the company are still visually suffering from the impact of the corona crisis. The company do have significant exposure to the real estate market in that one of their core products, Forewarn, is largely used by the industry as a method of screening potential home viewers, and to protect their real estate agents.
Whilst growth in billable customers from their Forewarn and IDI offerings did occur, the growth was a little uninspiring. To add to that, the management earnings call was very brief. A quick overview from the CEO and CFO, and then two analyst questions and it was a wrap. This appears to be ‘normal’ for Red Violet. Looking back across the past few years of earnings calls, there have been similar length earnings calls, some longer and one with zero analyst questions. I suspect this is due to the lack of analysts covering the stock.
Anyway, lets get stuck into the earnings report for Q3.
Key Highlights
The following information will be as of FY20 Q3, unless stated otherwise. Any percentage comparisons will be on a YoY basis, unless otherwise stated.
• Revenues: $9.26 million +12.2%
• Adjusted Gross Profit: $6.56 million +60.7%
• Operating Loss: $918,000 ($1.03 million loss in FY19 Q3)
• Net Loss: $925,000 ($992,000 loss in FY19 Q3)
• IDI Customers: 5,758 +20.4%
• Forewarn Customers: 44,927 +88.3%
• Earnings per share: ($0.08)
Just as a reminder to readers, Red Violet operates two brands in IDI and Forewarn.
IDCore: Through the use of proprietary technology and large data repositories, Red Violet’s analytics and solutions hardness the power of data fusion, uncovering the relevance of disparate data points and converting them into insightful and useful views of people, businesses, assets and their interrelationships. The allows clients who use the data to better understand and execute all aspects of their business, such as risk, debt recovery, fraud and abuse, legislative compliance, and identifying and acquiring consumers.
Forewarn: This solution provides instant knowledge, prior to a face-to-face engagement with a consumer to help professionals better understand and address risk. Forewarn is an app-based solution and is currently tailored towards the real estate industry.
For further insight into the operations of the company, as well as the markets they operate in, you can check that overview newsletter I linked back in the introduction.
In terms of any new additions to the company, in relation to any new products or services, Derek Dubner , CEO stated that:
“We have a robust road map of new technologies, enhancements, functionality and products and solutions that will drive our business near and long term. And given the substantial inroads we are making with new customers, combined with the recovery of existing customers and pent-up demand, we are well-positioned for the remainder of the year and throughout 2021.
Data is the lifeblood of this digital transformation, but not just volume of data as too much data creates noise and inefficiency. Too much data creates fragmentation and the inability to glean actionable insight. Our mission is to continue developing and commercializing customer-centric solutions that solve for the data fragmentation problem, no matter the customer or the use case.
Our goal is to ensure the applicability of our solutions across as many industries and transactions as possible to increase organization's output and efficiency. We are very early in this mission and are well-positioned for the future.”
So nothing announced as of yet, but I am sure there are other uses for the data that Red Violet purchase, it will simply take time for them to locate one that is most suitable for their business model.
Clearly the company witnessed some cost cutting impacts from the perspective of their consumers during the initial outbreak of the crisis. Q2 revenues were fairly weak, but this was expected to be temporary. Revenues recovered somewhat in Q3, totaling $9.26 million, which is up 31.3% sequentially from the $7.05 million in the previous quarter.
Derek Dubner, CEO, made note of the impact from Q2 and how they targeted certain customers during the panic in the quarter. He stated that: “Another facet of our strategy was to use the crisis as an opportunity to increase our market share. We posited early on that in order to cope with the economic downturn, businesses would seek to cut costs immediately and identify greater efficiencies to implement into their workflow to offset the negative financial impacts to their business. We focused on these prospects who, as a result of the downturn, exhibited a greater propensity to entertain switching providers.”
IDI customers were up 20.4% year over year, totaling 5,758 in Q3, adding 383 new customers from Q2.
Forewarn customers were up 88.3% year over year, totaling 44,927 in Q3, adding 4,070 new customers from Q2.
There is not a wealth of updates or highlights to be seen here for Red Violet. Some nice growth across each of their platforms, and some rejuvenation of their revenues on a sequential time frame. I think the most insight will be learned from the study of their financials, so lets get stuck into that.
Performance
Revenues increased 31.3% sequentially fromQ2, showing the improvement. On a year over year basis, the $9.26 million revenues for Q3 increased 12.2% from the $8.25 million in FY19 Q3. Those revenues are of course split across platform and services revenues. Platform revenues grew 27% to $9 million for the quarter, reflecting 97% of total revenues. With the exception of the collections vertical within Red Violet’s services revenue, the company saw a nice recovery in transaction volume across the board, including some pent-up demand as businesses adapted and became more efficient operating in the COVID environment.
In terms of the services revenue, the recovery of their collections vertical has been slow, resulting from temporary government-imposed moratoria, forbearance programs and government stimulus. As such, services revenues decline 74% in the quarter and stood at $0.3 million. Management state that due to strong tailwinds, expected to develop throughout 2021 as the moratoria are lifted, that the services component of revenues will recover in early 2021.
The $9.3 million revenues for the third quarter, consisted of revenue from new customers of $0.7 million, base revenue from existing customers of $5.8 million and gross revenue from existing customers of $2.7 million. So, there is an element of recurring revenues here. Note that rounding gets us to $9.3 million, if you were wondering why it only adds up to $9.2 million.
Revenues for the year thus far stand at $25.62 million, up 20.6% from the $21.23 million reported in 2019. The company continues to grow revenues despite the ugly Q2 that they experienced. Granted, 20.6% is not exceptional for a small growing firm like Red Violet, but I feel it is suitable given the circumstances of this year.
Adjusted gross profit for the quarter was $6.56 million, up 60.7% on the year, which is an adjusted gross margin of ~71%. When we take a look at the actual gross profit, not adjusting for depreciation, we get a gross margin of ~59%, which is an improvement from the 54% reported last quarter.
Cost of revenue decreased $0.4 million or 13% to $2.7 million for the three months ended September 30, 2020 from $3.1 million for the three months ended September 30, 2019. Red Violet’s cost of revenue primarily includes data acquisition costs. Data acquisition costs consist primarily of the costs to acquire data either on a transactional basis or through flat-fee data licensing agreements, including unlimited usage agreements. The decrease in cost of revenue was primarily attributable to the decrease in transactional based data acquisition costs associated with the reduction in their idiVERIFIED services revenue. Management state that they continue to enhance the breadth and depth of their data through the addition and expansion of relationships with key data suppliers, including their largest data supplier, which accounted for approximately 48% of their total data acquisition costs for Q3 compared to approximately 40% from the previous year.
Other cost of revenue items include expenses related to third-party infrastructure fees. As the construct of Red Violet’s data costs is primarily a flat-fee, unlimited usage model, the cost of revenue as a percentage of revenue decreased to 29% for Q3 2020 from 38% for Q3 2019. They expect that cost of revenue as a percentage of revenue will continue to decrease over the coming years as their revenue increases and they can leverage that fixed cost model.
Sales and marketing expenses increased $0.3 million or 15% to $2.2 million for the third quarter from $1.9 million from the previous year. Sales and marketing expenses consist of salaries and benefits, advertising and marketing, travel expenses, and share-based compensation expense, incurred by the sales team, and provision for bad debts. The increase during Q3 was primarily attributable to a $0.3 million increase in salaries and benefits, as the company continues to invest in the expansion of their sales organization, and sales commissions from increased revenue.
General and administrative expenses increased $0.6 million or 19% to $4.1 million for Q3 from $3.5 million from the previous year. The increase during Q3 was primarily attributable to a $0.4 million increase in share-based compensation expense.
Depreciation and amortization expenses increased $0.3 million or 49% to $1.1 million for Q3 from $0.8 million from the previous year. The increase in depreciation and amortization for the quarter resulted from the amortization of software developed for internal use that became ready for its intended use after Q3.
Overall loss from operations for Q3 stood at $918,000, a slight improvement from the $1.03 million reported last year. For the year, operating losses are $$4.96 million, another improvement from the $6.34 million loss in 2019.
Net losses stood at $925,000 for the quarter, an improvement from the $992,000 reported last year. Net losses for the year thus far also improved, standing at $4.93 million in 2020 versus $6.22 million in 2019.
Overall, some improvement, but the extent of that leverage of fixed costs is yet to be fully realized yet. Next year, 2021, will be interesting for sure, provided there is an ease of lockdown measures.
Liquidity
Losses are fairly small, and liquidity looks fairly good. Red Violet currently have a total of $7.89 million in total obligations due, with around $4.75 million of that being due within the next year.
Cash stands at $12.44 million, which is more than enough to cover any current obligations, as well as their entire outstanding obligations. In total, Red Violet have around $15.98 million in short term liquidity at their disposal. Considering they burn ~$10 million in operational costs each quarter, and have $15 million in liquidity plus around $9 million in sales each quarter, this looks manageable for the time being.
In relation to cash burn, MacLachlan stated that things are looking a little more promising in that they are no longer burning cash in Q3, an are instead earning cash. See the below for more flavor on that.
Daniel MacLachlan, CFO, stated that:
“Internally, we track our operational cash burn versus burn on a monthly basis by calculating adjusted EBITDA and subtracting the cash we use for the development of internal use software and other capital expenses, both found on our statement of cash flows. Based on this earn-burn analysis, we earned $0.8 million in cash for the third quarter 2020 compared to burning $0.4 million for the third quarter of 2019.”
Red Violet currently have $2.15 million in loans outstanding, as part of their COVID Cares Act borrowing, with $1.05 million due within one year, and then the remaining $1.09 million due before 2022.
It is possible this loan may be forgiven however, in that they may not have to repay it. The Loan may be forgiven partially or fully if the Loan proceeds are used for covered payroll, rent and utility costs incurred during the 24-week period that commenced on the date of funding (the “Covered Period”), and if at least 60% of the proceeds are used for covered payroll costs. Any forgiveness of the Loan will be subject to approval by the SBA and the Lender. The Company will be required to apply for such forgiveness within 10 months after the Covered Period. Because the Loan exceeds $2 million Red Violet anticipates the U.S. Department of Treasury will audit the loan.
Although Red Violet used the proceeds of the Loan for such covered purposes and intends to apply for forgiveness by the end of December 2020, it can provide no assurance that the Company will obtain forgiveness of the Loan in whole or in part.
There are also some operating lease liabilities scheduled to mature over the next few years, but nothing that appears to severely impact liquidity in the near-term. With $178,000 due over the remainder of 2020, $724,000 in 2021 and $743,000 in 2022. You can find the remaining maturities in the below table.
There is also the matter of capital commitments the company has in place, with $1.74 million due in 2020, and $5.6 million due in 2021. These commitments are fairly steep in relation to the current cash flows are the business, so it will be interesting to see if they can beef up revenue in 2021 to support these commitments.
So there are a few things to keep an eye on from my end, but in the near term, liquidity looks good for now. Happy with that.
Cash Flows
Cash flows from operations stood at $4.75 million for the 9 months of 2020 thus far, up from $435,000 last year. Cash flow of $4.75 million was primarily the result of the net loss of $4.9 million, adjusted for certain non-cash items like share-based compensation expense, depreciation and amortization, write-off of long-lived assets, provision for bad debts, and noncash lease expenses, totaling $10.3 million, and the cash used as a result of changes in assets and liabilities of $0.6 million, primarily the result of the decrease in accrued expenses and other current liabilities and operating lease liabilities.
Share-based comp of $6.4 million is pretty steep, but not unheard of in small companies. The company state that they use SBC to incentivise the best talent, as well as retain them, in the company. I can live with it for now.
Free cash flows stand at $4.6 million for the year thus far.
Outflows from investing activities stand at $4.4 million for the year thus far, largely due to capitalized costs from intangible assets.
Inflows from financing for the year stand at $324,000 after the $2.15 million inflow from their loan via the CARES act, and offset by the $1.82 million in taxes related to vested stock units.
A Few Notes from the Call
Here i wanted to share a few interesting quotes from management during the conference call. During the question and answer session.
I have cherry picked some of the responses i found most interesting and useful for you.
One thing that is worth noting, is that the earnings call for Red Violet are super short. I do suspect that is likely due to the lack of analysts covering the company, therefore the number of questions were lower. There were literally two questions in the entire earnings call. The two questions below, are the entire question segment.
QUESTION: “Yes. So it looks like you had some really strong growth in revenue from existing customers as well as decent growth from existing customer base revenue. However, the revenue from new customers was down over prior year. Can you explain why that is? And if there is any concern there?”
DANIEL MACLACHLAN, CFO: “Thank you for the question. This is Dan. Yes, so as I discussed in my commentary earlier, our gross revenue from existing customers was very strong, both sequentially and over prior year. This is a healthy sign for the business as it tells us customers who have been with us longer than 6 months continue to grow their volumes. It tells us that our customers continue to rely on our solutions, both in their everyday workflow and as a means to help drive their business as they get back to business.
As for the new customer revenue, we are very pleased with how the numbers are trending. What we're really seeing in this metric for the third quarter is really a result of the second quarter COVID trough where we saw fewer billable customers added, resulting in less revenue generated from new customers in the third quarter. Looking at the onboarding of over 380 billable customers in the third quarter, which is at a higher onboarding rate than our 2019 average, it really tells a story and provide a very healthy leading indicator of future revenue. So we continue to see customers who adopt our solutions grow in scale and volume over time, combining that with our low attrition rates and where -- we are very confident in the overall makeup of our revenue. And so we're confident today in how and where that revenue is growing and how it is trending.”
QUESTION: “Good quarter. It's just kind of more of a technical one in terms of your internalized software and depreciation. And kind of where are you -- that grew significantly in terms of what you're capitalizing. Kind of where is the run rate to expect? And maybe give us a little update on what the trend of that will be.”
DANIEL MACLACHLAN, CFO: “Yes, sure. So the last few years, we've been running about $6 million a year in capitalization of internally developed software. We've added additional resources and product development. But over time, some of that development goes towards kind of the maintaining, if you will, the system and so you don't really capitalize that.
So from a trending indicator standpoint, you'll probably see, over the next year or 2, very similar capitalization of about $6 million. But as a result of kind of overall revenue and overall time, it's actually decreasing. But on a dollar-for-dollar basis, it will trend around $6 million yearly over the next probably 1 or 2 years.”
FOLLOW UP QUESTION: “Yes. So you'll start to get some -- you -- with a 40% increase, you're kind of at where the number will be. So incrementally from here, you'll be able to leverage that number?”
DANIEL MACLACHLAN, CFO: “Correct. And that is the unique fixed cost structure, if you will, of the model that provides us so much leverage.”
Forward Guidance
The company issued no guidance for next quarter or FY21.
Summary
So Red Violet for me represents a 2.63% weight in the portfolio, making it the smallest position overall, as well as being the smallest market cap in the portfolio at ~$270 million as of November 20th.
The thesis still remains in tact, but with the nature of the company being fairly infantile, it might take a while before much moves. I have utmost patience in this one, provided none of my sell triggers are activated.
Fundamentals remain suitable, liquidity is good, and their products are still growing. The lack of discussion in the earnings calls are disappointing , but that is part of the parcel of investing in smaller cap names.
During 2021, it would be nice to see what a full year of smoother operations look like, with some recovery in that services segment. The fixed cost model should allow for some attractive leverage in terms of gross margin if they can inflate their revenues over the next year or so. Overall, I would hope for a far stronger 2021.
Overall, a fairly average quarter for me, 5 out of 10.
One to watch, for sure.
Until next time and HAGW!
IT

I currently work in an executive level role at a company that I've only been with for 6 months. I walked in with a maverick attitude to implement new systems, accounting practices and a robust database for our operational metrics. We've accomplished most of that but at the cost of weekends, evenings and holidays. Our monitoring software just recently let me know my average work week is near 70 hours and, frankly I'm exhausted.
The pace unfortunately has been driven by our executive team and we have another 3 months of this pace before we're in a good spot as a company. There's a light at the end of the tunnel but damn, its faint.
This last month a former boss of mine reached out and offered me a new role, slightly higher salary doing the same thing but with less hours. The timing couldn't have been better but its put me in a dillema. I've never left a job this early on, and, during such a critical time. I casually hinted to my CFO that I'm exhausted and ready to leave, which, surprisingly he reacted to by offering to delay deadlines to help. Its a kind gesture but the reality of whats ahead is causing me to wonder if he can follow through.
Here's my question; do you hope things get better at a job you've had half a year or take something new with a boss you know won't overwork you? More so should I worry about burning a bridge or will it not matter in 3 years anyway?
I'd appreciate insight from both sides of the fence if possible. Thank you all!

120th installment. (Sorry it took so long to make! Hope it's worth the wait.)
"Let us know, did 2021 get better, the moment midnight struck the clock?"
"You damn time travelers, I hope you're enjoying 2021."
"Listen, it's the best community because of you guys." (Not every quote needs to be cursed, there can be wholesome ones, too. Tho this one was said in a bit of a panic...)
"You guys gotta stop giving me stuff." (No. <3)
"'You can't stop me'? Everyone says that and I say I'mma permaban you."
"I'm sick of you giving me money; you're permabanned."
"We have standards here, I don't even have the mature tag anymore!"
"It's like beetelgeuse, you have to say their name three times in a row to summon them" -Brian, simultaneous to nottheshenerd (and shortly after identical sentiment from shira)
"Yo, the mods really do more than I do to make that happen" (I like this quote out of context because while the obvious meaning is for wholesome mod preach, it can also apply to the cursed content, which the mods contribute more to than Brian does)
"I missed whatever it is, I don't care." (Toxic streamer doesn't care about his mod... D: )
"Thank you, (couldn't make out the username) for sticking around long enough to save up 10,000 bits for...whatever the hell that is." (Bits are apparently interchangeable with huevos to Brian...)
"If someone walked up to me and they were like, 'here are ten thousand eggs', what would that be? A dozen eggs in a carton, I'm not gonna do the quick math on that one, but..."
"I hopefully will have a cat, when I come back."
"Last day of the year, who even cares about math?"
"Morgan has brought the small boy, the smallest boi in all the land"
"His (Plinko's) neck is like the shape of a pretzel top right now"
"He's (Plinko's) trying to spider-man kiss Morgan."
"We do call him (Plinko) shrimp cat all the time."
"He's (Plinko's) like a sack of potatoes, sometimes he just goes totally limp."
"He's (Plinko's) the forever baby."
"We call him (Plinko) baby yoda all the time."
"You guys thought that I supported myself as a full-time content creator this entire time but really I get paid an entire year's salary to fall down a pole very slowly." (In the middle of time square. In the shape of a ball.)
"New York City has already paid me really really well."
"The big bucks from Mister New York City himself, CEO of New York City. And CFO of New York City."
"Oh my god Don Biscotti, he lives on."
"As we know by being intelligent, and safe, and smart consumers of things...I guess 'intelligent' and 'smart' are sort of the same thing, so that was kinda redundant, but that's how smart I think you guys are!"
"Have I ever told you about the time that I killed 2020 with my bare hands? Not 2020 like a person, or a personification of 2020, the entity and idea of 2020, I killed it, I murdered it, with my hands."
"TOS? Listen, it's a thought, it's an entity, it's not an individual that I killed, so it's okay, okay?"
"I just realized that you can abbreviate Storytime Dab as STD" (and history was made on the subreddit)
"How on-brand is it that I, unknowingly, created something called storytime dab that can be abbreviated STD?" (Very. <3)
"I'm spilling water on my face because the rest of my brain function is clearly not used for any motor skills, it's all focused on how we have something called storytime dab which can stand for STD."
"The glass is broken, and the shards have flown into my face."
"To start out our storytime dab, no abbreviation, no acronym needed, you guys know it as a storytime dab..."
"You don't have to have an acronym for everything, chat! I don't call you guys c..."
"That's gonna live rent-free in my brain forever now. Worst coincidence of 2020. Of course we have to leave the year with this."
"December 31st, 2020, the entirety of the world called for a hero. They needed someone who was brave, and strong, who could face this beast head-on. Unfortunately, that guy died in a fight against a previous supernatural creature, so uh, they sent out me, I volunteered. Nobody else wanted to take on this thing. As a result, I was selected."
"this disgusting, bad negative terrible energy...and I was interrupted, by a bit message, so I had to wait a while, before I charged of to battle"
(not Brian; this is nottheshenerd) "Captain STD vs 20dumpy" (/not Brian, this was nottheshenerd) (I feel like this would make good fanart--Brian, as Captain STD, squaring off against 20Dumpy...)
"Not every meme survived 2020, not every good memory...some fell early in fact. Unus Annus found an early grave in the middle of the battlefield, rest in peace to them."
"I had a way better joke but chat liked to derail me with an STD joke!"
"How DARE he (Mark) make merch with hangul on it, after I made plans to make merch with hangul on it!"
"Who knows where things are with UPS after a giant orange asshole tried to dismantle them?"
"It's my brain shit, you know how I am."
(not Brian; this is KotaMouseOfficial) "wait girbeagly (booty)shorts with plinko on the left and sig on the right" (/not Brian, this was KotaMouseOfficial) (chat was talking about girbooty shorts, and this seemed like an actually legit good idea to remember)
(not Brian, this is annawaitwhat) "or, hear me out, girbooty shorts with a bagel right over the borthole" (/not Brian, this was annawaitwhat) (same topic as above, just...more cursed)
"oh hey guys I'm a wacky twitch personality!!!"
"You have the power to ban anyone in chat, shira, that's how much I trust strangers."
"Happy new year to those in the timezone where the ball's already fallen."
"A, you called it girbooty, so that's never fucking happening ever, and B...nnno. Not an item I keep in stock. So, no, and doubly no. In fact there's so much no going on, if there's like a mirror, from like, neutral, and there's a yes, and a no, I guess on your screen it'd be a yes or no, and a yes, the needle has gone full tilt through any limitations 'no' normally sets, so like there's no loophole that would ever have it happen."
"The fact that anyone is writing girbooty in the chat seals the fate of that product; it will never happen."
"Little pocket-sized cat-buddies, going with you on adventures."
"but goddammit, if you wear skorts, GET THE FUCK OUT OF HERE!"
"no skorts, ever"
"Oh god do you guys have hand sanitizer, for my body?"
"and I'm axing the staff"
​
"*heavy inhale, then long heavy sigh* I didn't want to have to make this video. Um. I, uh. You know, I, be-uh, uh, I've uh, I've been dealing with a lot lately, um, by now I-I'm I'm sure, uh, people have heard about, um, my, uh, recent, uh, ther-there was a situation I said something that I GUESS could be construed as 'skortism'? Um, and, uh, *inhales deeply, then breathes out deeply through the lips*, I, uh, I just don't *sigh* I don't feel right, leaving it, you know, unaddressed, um, there's been so many people in my uh twitter mentions, you know I been-I just been trying to just sort of go about my business and like, you know, put up vods, every like three days, on the vod channel, it's it's very time consuming it's-you guys, there's so much pressure on me already, trying to just repost a vod on the vod channel like once every three days, and, and, but every time I like just promote, you know, any time I tweet, or, or, put out a video, it's just like all the comments are like you know like about this incident that like I-*sigh* I...I basically...I-I said...um, that I-I HATE skorts. That, uh, uh, anyone who wears skorts is disgusting to me, and I-I can see now, now that it's like been brought to my attention, um, that uhhh, I-I guess that basically what I'm trying to say is, uh, if what I said offended you in any kind of way, um, then, I...I hope you know that I that I didn't say that from a place of hate, that was just a word, uh, a mindset that um, growing up, uhhh, you know, it was just okay to say; it's a sign of the tim-you know, I'm in my thirties, and, uh, we used to yo know just say whatever we wanted about skorts, back in the day, and, uh, and uh, you know, it's-it's it's not okay, uh, in 2020, to say, um, these types of things about skorts. And, I, uhh, *heavy exhale*, if you were-if YOU were offended by what I said, uh, I'm sorry to you, for, uh, saying something that might have been offensive to you, um, I'm sorry that you got offended, and, um, you know I-uh-I've made...a...uh, ten dollar donation to the national society of skorts, um, NSS is uh apparently doing a lot to raise skort awareness, uh, and, uh, I-I hope that, you know, that ten dollars goes a really long way, uh, to showing that I-I care about this issue, I don't really know what NSS does, um, I'm not sure how the money's used, but I hope as people who deal with this, uh, issue of skortism on their side of things, uh, the ten dollars can, can help them, uh, I, uh, to anyone I disappointed by doing this, uh, I-I hope people know, you know, th-I've been going through a lot, I've been going through a lot recently, and, um, I ju-I-there's there's a lot going on in my life, and, uh, I-I said something that I guess I wasn't supposed to say because there's so much going on in my life, and-and like I said, I-I come from, I-I come from a, background where it was just okay to talk about skorts in that way, and, now I see that the internet doesn't like that, so, um, I will make sure that I, uh, I don't do that, uh, again, um, uh, that being said...uh, uh, 2021, uh, January, we are launching the new merch line through, uh, second city prints! Some really cool designs guys I think you're really gonna like 'em, a lot, they're-they're great, they're sooo, they're sooo...fresh lookin', they're gonna give you so much swag, it's gonna be sooooo dope when you get these, they're lit, it's gonna be excellent." (the full apology video, in quote form)
​
"I have an incredibly small bladder."
"Be nice to the mods or they will kill you. They will kill you dead, that's not a joke. That's, uh, for legal reasons that's a joke."
"We don't need to bring up pee consumption ever again."
"'I just found out that hungry pumpkin is gone forever'? Ohhh no, Lav, I'm so sorry for your loss!"
"I for one welcome our HTML5 overlords"
"I wanna be in an anime, it's no fucking secret; I'm a weeb"
"HOW DARE YOU! Pop tarts killed my entire family!"
"They need to go outside and touch some grass."
"Listen I live in New York State, we take bagels very seriously here, it's an important food group, it's a different food category from bread as far as any deli or bakery is concerned."
"Bagels are, are something, that's like bringing religion in this chat, we don't do that."
"I'm old as dirt, my bones are literally dust."
"It's mythical, it's a legendary idea, which means at some point we're gonna have to actually pull the trigger on it."
"I'm a basic bitch"
"What does a waterfall smell like?"
"I don't like la croix, if Danny Gonzales ever wants to fight me over that..."
"Get your Roblox accounts ready."
"Yes it's stupid, but that's on-brand."
"We're like possibly the cringiest community around."
"When you get caught by him, your body explodes into a million pieces, and your sprite goes 'AAAAAAAAAAAAAA' or something like that, and that's the entire game, there's no objective, there's no goal, you can't win it, you just...die, at some point, from the hungry pumpkin going 'I am very hungry'."
"Lav has actually gotten cancelled. Lav got cancelled during Roblox."
"We got Nancy Drew games out the ass."
"2021, full of potential, full of possibilities!" (Not a cursed quote, not even really wholesome, but I liked it all the same.)
"There's a lot of goofy, cringey memes we're gonna be leaning in on in 2021."
"I am old as fuck. I am so old, I keep saying, my bones are made of dust."
"When you get older, you get less sleep, but when you get older, you need more sleep."
"These eyebags need to be checked at every airport I go to, for sure."
"We've got the maximum blursed energy recently."
"Why are people trying to eat vods?"
"It's more of a concept than a physical thing."
"If you find a way to print out a bitcoin and eat it, I'm not encouraging it, but I also lack the legal power to stop you."
"2021 resolution for some of you: find a way to eat bitcoin."
"I do not know how the average vod goes about its day."
"As far as I know, vods exist in a subliminal weird parallel pocket dimension."
"your balls drop huEhuhuhu"
"Not everybody wears skorts, but everyone can wear skorts."
"oh no boobs are stealing my views" (is what idiots online say)
"Please don't pee when you see my girlfriend, that's the most, the least flattering thing you can do."
"Don't do that, don't pee"
"I'm not banning peeing in general, chat!"
"Please buy adult diapers at the least, and don't tell us when you're peeing."
"It is true; Every time Lav and I have met in person, Lav has just peed uncontrollably, with just eye contact, with no words being said"
"The whole reason I don't go to cons anymore, it wasn't covid, that was just a convenient excuse, the whole 2020 I didn't go to conventions because I was afraid that Lav was there."
"This is the way this community works. Every day we have a choice. Every day we find ourselves on a path where conversations are what drive us forward. We're making forward progress down a pathway, and every now and then we reach a split in the road, it's sometimes just a fork, sometimes it forks in five different directions...we have options. To not go down these pathways. I know some of you like to go 'heeheeheehee look at me I'm being sneaky' and you tip-toe a couple steps down one of the cursed paths...but, um...we don't need to go there."
"You're seen and you're valid and you're doing your best" (wholesome quote <3)
"Yes, I am ignoring chat right now because they're being absolutely fucking stupid right now." (Toxic streamer ignores chat. D: )
"The rainbow in chat, now that was pretty good."
"I'm gonna insert myself in here."
"Toxic streamer burps, the most cancellable thing."
"You're getting the dregs of the stream right now."
"I already look like I'm in anime, apparently."
"I don't want to have matching hair with Ethan that's the most cringe thing to me."
"(Dante) he's like, one of the original gaming himbos, for sure."
"I think that if I curled that, I would just have weird ramen noodle hair"
"If I ever got on memewiki, that'd be neat." (redditors take note!)
"girbeagly dot com, to be the hub of where you can find all the information about me, girbeagly! If you're a company who wants to work with me, find out about my portfolio here."
"Everyone has a part to play in this community." (ending on wholesome <3)
"This community came together and changed lives." (wholesome <3)
"2021 is our oyster."

I would like to think my FI journey has been unique. I’m a super spender in every sense of the word. I’m also pretty much in the middle of the FIRE journey and that isn’t something I see written about often. There are lots of stories of those in their last year, should I or shouldn’t I pull the trigger, those in their first few years of full retirement, and beginners. However, I’ve noticed a lack of those that are pretty much in the middle, maybe not even that serious about FIRE as a driving goal, but instead use the principles to be a better capitalist.
My story has nothing out of the ordinary beyond some rational choices and being overly conservative with our money, and an overwhelming desire to build businesses. We may not make it to FIRE early in life; we are having children and FIRE is not our number one concern or priority. As I’ve earned more I’ve absolutely let lifestyle inflation happen and we are 100% ok with that. The reason I wanted to tell my story was to tell the story of how these principals will always improve your situation at nearly every income level and I dream of a society (American) that can begin to see beyond the now.
\Before we begin, anytime I write something that shows I had/have extreme privilege, I promise I feel it and much as you see it. It would just be exhausting to call it out every time so consider this my one acknowledgement that I have had it WAY better than almost everyone in human history and I do feel guilty about that most of the time.*
I’m 35 years old and my wife is 30 and as of today we are roughly 60% of the way to FI/RE with a baby on the way.
I grew up in a lower middle class household in the midwest in a town you’ve never heard of but you’ve seen dozens of them. Both my wife and my childhoods were pretty traditional for the time in middle America, but most of this post will be from my perspective. For middle America it didn’t feel like we had much, but we had enough at all times. We were absolutely paycheck to paycheck, but there was some excessive spending and a gambling addiction. Divorced Parents when I was young enough to have really vague memories, but all in all I would say it falls right at an average American childhood in the 80s-2000s
My exposure to money was basically watch and learn. I had a bank account setup when I was old enough and told to save some everytime I made money “pay yourself first”. Something my parents didn’t really do much of, but at least they knew enough to try and teach me that. From there I was on my own and learned some bad habits, even though I always knew I shouldn’t be spending I just did it anyway. No matter how insane a purchase I made felt, there were others out there doing it way stupider, but being praised for it more. I began to embrace the research process to get the best thing that’s also the best value. Cars had a sweet spot at 4 years old from lease turn ins. I learned I could buy a 4 year old, low mileage lease, drive it for a year and sell it private party a year later for what I paid. My average age for owning a car must be like 9 months, but I have only had 1 or 2 instances where I lost a lot on a car. I began applying these principals of Capitalism to everything from bikes, to lodging (sleeping in my car), to growing my own food vs buying it. Nothing was off limits in the pursuit of living a life of luxury that was outside my income. See I wasn’t trying to live frugally for the sake of living frugally. I was doing it for the purposes of getting all the best and most luxurious things cheaper than the average consumer pays for the ordinary.
Some perspective, because frugality is a spectrum and I’m on the extreme end (spendy).
When I’m into something I go for the absolute best, every time. Some examples of things I bought before I was 25 while never making more than $50,000 a year and sometimes way less:

• Almost the best gaming computer you could buy at the time - pretty much didn’t hold back here. I wanted a VR racing sim and I got one, but I spent months researching all the most cost effective components for the money.
• Between 8 and 11 different cars from age 16-25 - see description above
• High end triathlon equipment - The sweet spot for bikes is pretty much anything other than new. I can’t think of any market that has a worse resale value than bikes. Buy it 1 year used from some dude on pinkbike and you’ll pay 40% of retail.
• Registrations for races some at $500+ events, plus travel for 2-3 days, multiple times each year. - Slept in my car a lot before these races. Even would make sure and stick around to the end of each event and offer to take home the unused food. Each race I did I would average - 1 weeks worth of bananas, tons of granola bars, as much as I could carry of some sponsor that had a new product they wanted people to try. There are some races I did where I brought home more money in food than the entry fee of the race.
• Designer furniture barely used (picked it up in my old van from the biggest house I’ve ever been in. My wife and I were terrified moving it for fear of breaking something we couldn’t afford to replace) The 2 couches we bought retailed for over $10,000. We paid $800….. In cash. Still have them in a rental unit today. They look great for their age as they are extremely well built.

I was starting to think that nothing made sense. For the most part, I knew what my friends made; most of the time it was more than I was making and somehow I always had more, newer and cooler stuff than them, but they were the ones struggling with money. I almost never struggled with money even for the years I was near the poverty line for my income while taking on student loan debt or during a 4 month stretch of job loss where I was denied unemployment.
I really only saved for the short term. I would save for a goal, buy whatever that goal was depleting my savings or investments then repeat. I learned early on that having cash on hand would always get me the best deal and therefore made my meager salary go farther.
It wasn’t until I was around my mid 20s when a conservative and rich aunt told me about Dave Ramsey that I really started to embrace what FI/RE was and could be.
It’s hard to explain my relationship to DR, but what he was saying was truly life changing, but not for the reason that most people say DR changes their life. DR didn’t teach me a new way to look at money, he was simply the first person to even think remotely similar about money as I did. That at almost every income level, spending less than you make is really all that matters. If you live by that principal and apply a loose plan you should at least be able to survive in our current society. Up until this point in my life I felt I was the only person who felt I was doing well with money and I didn’t think I was doing that well. I always felt my spending was out of control and I could be so much more frugal. I actually remember the exact event that made me stop having debt when I was at my lowest NW.
I went to sign up for the Pigman triathlon short course, it was my favorite race and they did it twice a year. It was 90 minutes away from home so it was a perfect weekend trip for me. I went to register and didn’t have the $65 to write a check (yep, I’m old). I was going to put it on my credit card, but couldn’t find my wallet. I knew the number was printed on the statement so I went and opened the mail it was in. The amount of interest I was paying that month was something like $71. I got so pissed that if I had no debt I would have had the money to go do my race. I swore off debt at that moment and never looked back.
I was learning the FI and Dave Ramsey principals through an expensive trial and error process, but it was when I read DR’s book that it gave me justification that my instincts had been right about money and this guy proved to me that it works. I felt he was wrong about a few things, namely his aversion to credit cards never made any sense to me; later his conflicts of interest with investing. I hate debt far more than is rational, but credit cards are not debt and making 2% on every purchase for no additional effort? That’s foolish because it requires no additional effort in my daily life and has an immediate return.
From there I went on to Mr Money Mustache.This was my guy. Not only did I agree with him on a lot of stuff, but he was cool. Even if I was not making all the same choices he suggested I could at least follow his logic of thinking on nearly all of them. His suggestions always made me have an internal question of “Yeah, a minivan is the most logical vehicle for money savings” That’s how I ended up with a Honda Odyssey. However, I still was using these savings to be able to afford a more expensive lifestyle in the hobbies I loved and luxury is the rest of my life. From there I dove in deep into FI/RE blogs and knew that my next savings goal to add should be early retirement, and while it wouldn’t always be the number 1 goal or even a major priority, it would always be on the list. That was 9 years ago and is as close a start date as I can guess.
After digesting all the information I could I decided to go the “large income route” to achieve FI/RE. I love buying shit too much to lean fire so I knew the only shot I had was to get my income way up. It basically needed to double. When we decided to start my wife was still in college and I was working a lower paying accounting job and working part time at a running specialty store. I had also just started an additional part-time contract job timing races across the midwest. Between us we were making around $40,000 a year. Still living pretty large on that in our small, but insanely affordable condo.
Since I sorta had a gig economy work/life including one that was a 40 hour a week full time job I knew that going all in on working was my answer to FI/RE. I was not short on opportunities to make money, and I just needed time to do them all. I started with my accounting job. I was still pretty new to the accounting field with only 6 years of experience up to that point. Rather than try to earn more I took the gamble of working for a non-profit for $26,000 a year. In it for me was being 25 years old and having the title of Accounting Manager, managing a multi-million dollar budget, reporting to a board of directors, and having a small staff. From where I am today in my accountingcareer I can draw a direct line back to accepting that very low salary for a position I was under qualified for and figuring it out as I went.
The person I replaced was retiring so the systems were…..ancient to say the least. After learning the way the old guard did things I immediately began automating everything; tuition payments, contributions, tax documents to donors, reporting to the board, and anything else I could automate I did. This had the surprising effect of making me bored as hell most days.
It took me about 6 months to turn a 40 hour a week job done by hand into about 12 accomplishing even more tasks. In the beginning I fucked around but that gets old quick. Playing Hearthstone or Diablo for 6 hours a day in your office isn’t as fun as it sounds, trust me on that. I was working a couple part time jobs at this point, all of which were in my passion topic of racing, running, and outdoors. The problem was that I was so bored during the day that I wasn’t motivated to do much of anything the rest of the time.
It was important for me to always be in my office during business hours to help or answer questions, but as long as I met all my deadlines and my Board was happy with my performance, always made the non-profit the priority when I was there; then I felt comfortable spending the rest of my time there focusing on starting my own business. If it became too much I would drop the business before my boss even knew something was happening or off.
I applied all this additional time into focusing on Race Timing and Race Management. I had spent the last 7 years or so racing at these events any chance I got. It was one of my favorite places to be so the idea of being able to be PAID to be there? I was very entranced by this line of work. Through some connections I had made at events I started working for a guy who was kind of a prick but had the industry knowledge I needed. I worked for him for pretty cheap - $250 per event that I worked. This meant that I would leave after work on Friday, drive between 2-4 hours, sometimes stay overnight (slept in car), would work the event by myself and drive home to be back to work Monday morning. I was learning a lot and especially a lot of what NOT to do in business from the company owner. He was the definition of small business. It was just himself and sometimes he would hire friends or family to work these events with him. He hired me as a contractor on a per event basis and for the entire time I worked for him he only ever hired a couple of my friends when I said I needed help.
This guy was very smart and knew the technology better at the time than I do still almost 10 years later, but he was a fucking trainwreck. Here are some of my ‘favorite’ highlighted memories:

• At a charity event for a Lung Cancer charity he got into a screaming match with the Fire Chief who was the top fundraiser - he was never allowed to return and I still work this event to this day.
• He would send out new “employees” with almost 0 training. This was at a time where learning to time a race was a very difficult process where you must follow precise instructions. My first event I worked for him I had a 1-30 minute training session at his house and was told to call him if I had any trouble. He was working a race that same day and had no cell service. Results should take minutes to produce - took me 2 hours that day and it was basically me stumbling through some very old help documents.
• He would never invoice - eventually I took over this part for him as an accountant. He had some clients he hadn’t invoiced for 18 months.
• He never responded to clients and would be SUPER rude. They would ask something simple in an email like “Will you be bringing a clock we can use?” His response would be some swearing and then a response like “NO, if you would read the contract we charge an additional $50 for a clock.”
• My tally of annual, good money, contracts he lost for being a total dick was 11.
• Likely the same contracts lost for not communicating or forgetting something the customer ordered or some other catastrophic failure (ex. Inflatable finish line, clock, equipment that would break because he didn’t maintain it, etc)

I learned almost everything I know about how to run a business and the way I operate today from watching him during this “apprenticeship”. I was taking races every weekend they were available cause $250 was a lot of money and working a bunch had the added benefit of not spending as much. Once I started to do his accounting I learned this guy is making FUCKING bank. This bumbling fool is making north of $200,000 a year in this business and he can’t even invoice people or just be polite. One event a year that we did together I was getting paid $250 and he was clearing $15,000.
This motivated me so much. I saw the pot of gold at the end of the rainbow. The curtain had been pulled back. I saw a hole in the marketplace and I was going to fill it.
I was saving as much of my timing money and running store money as I could. I went from saving $0 for retirement at 24ish to saving about $8,000 a year. I knew it wasn’t going to be enough and so I just kept committing to working more and more, and at this point I was just saving to start a business. FIRE principles applied to our life, but really only for the goal of investing in a business. After a few years of some job moves in Accounting to timing more events, to doing the finances for the running store I had gained a sizable amount of knowledge and set forth on a huge life change.
I was going to start my own race timing business and move to where the races are, where I’ve always wanted to be, Colorado.
We made the move happen in a frugal way, staying with family here while my wife stayed with my folks for 6 weeks (she’s a saint). This was the only way we could afford this move, and was to save every penny possible along the way. We sold our beautiful house in Iowa for $150,000, exactly what we paid and bought a $300,000 fixer up that when the wind blew made the whole house shake. Double the money and a way worse house.
I quickly found a full time job that would pay the bills; one I was also able to automate and optimize to give me more time throughout the day. From there I spent all my free time building another new race business. From everything I learned from my ‘mentor’ I knew everything I didn’t want to do so I decided to model the business around some basic principles:

• We will not compete on price - we will never be the cheapest option
• We will do anything a client asks, if I cannot do it, I will find them a referral I trust(within reason)
• We pay our staff at least double the industry average
• We are always available to help by phone, text, email (within reason)
• We will do everything in our power to make your event as good as we possibly can
• We only bid on events we want to do or believe in - Currently we only bid on about 50% of RFPs we receive

My theory was simple. If we charge way above the amount where everyone is fighting over margins, we can hire the best and afford to give each client a ton of attention to detail. An event planner is busy, they don’t want to think about the timer. If they are worrying about you then you fucked up.
We started slow, but my margins were strong enough that I was squeezing out around $50,000 a year my first year. I bought all my equipment for cash based on my hatred of debt. This allowed me a ton of freedom to pick and choose the work I wanted to do. It also started my reputation of “They are good, but you’ll pay for it.” A compliment I could not be more proud of.
All along the way I’ve always had an accounting job full-time to which I follow the same plan I’ve done for the last 12 years.

• Find a full-time job and be open with them on expectations
  • I own a small business
  • This full-time job will always come first when I am here
  • I will never miss a deadline, appointment, or commitment for this job
  • I have avoided large companies for this reason. My accounting life has been in small businesses and nonprofits. I’ve found those to be the most understanding and flexible. If you find the right small business owner they won’t dislike you having a side business; they will respect you for being a motherfucking hustla.
• I learn the job and then spend all my time automating and simplifying every task, down to small and seemingly insignificant.
• Now with a reduced time load at this main source of income I focus on other money making pursuits.

All along the way I was still involved at the retail store I discussed earlier. Since I’m never one to turn down someone paying me for work I did accounting and consulting for this retail store. Through a series of circumstances I took full ownership of this company in November 2019. (I did pay for it, but it was the result of an untimely death of a close friend. A situation that I wasn’t planning on for many years to come.)
As of today FIRE principles have helped me build a very privileged life. My events business is 100% shut down, but it doesn’t matter. I was able to pay my employees a sizable lump sum each for not working this year and since I run the business with no debt we only have $800 a month in liabilities. Compare this to some of my friends in the industry who have multiple leases on cargo vans,a warehouse they rent, six figure debt on equipment; I don’t think many of them will survive this.
The Running Specialty store I now own is in the exact same situation. Our one competitor in town is struggling because they have very high rent and are part of a franchise. I purchased our building and we pay cash for our inventory. My fixed expenses are very low and since my front line staff is working during a pandemic I just gave raises to everyone, averaging about 20%.
As of today I’m about 50% of the way to FI. I could likely just quit my accounting job and live from my businesses but I see no reason to do that. I’m having too much fun and have really been enjoying my money. I think the uniqueness of my approach is that I embrace a lot of modern culture but just attempt to do it in a more frugal way. Like most 30somethings that get a taste of success I made sure to buy a sports car. I’ve been into cars my whole life and it’s my greatest weakness for sure. Rather than go to a dealership I bought an immaculate 2004 911. After fixing some mechanical issues which made the purchase price cheap I only have about $30,000 in the car. It’s worth about $35,000 now. I think Mr Money Mustache would beat the shit out of me for buying that, but I got the dream car I had on my wall as a kid AND it’s costing me very little compared to my income, net worth and the fact that I learned everything I could about the 911 market and bought something worth more than I paid.
The major changes that have happened in the last 6 months are really what motivated me to write all of this down, because so much of what I knew in FI/RE has changed, and it feels like it’s all for the better.
There is no denying I’m a workaholic. The only thing I can say is that I really do love the grind. I’m friends with most of my clients at this point and owning a running store is like the coolest thing in the world. What changed in the last few months was my approach to investing.
As my income has risen, and there have been no new businesses for me to start since my time was pretty optimizely spent; my investments just kept growing.
6 months ago I was sitting on $200,000 in pre tax and $300,000 in after tax and savings.
I always felt that I can quit my accounting job and focus on my businesses when I hit $1,000,000 net worth. The thing that doesn’t get discussed much is that $500,000 in investments is a super boring spot to be.
For a person like myself who likes to be in charge of his own destiny seeing that $300,000 in after tax move with the market was annoying. I wanted it to go faster, but also I just felt so not in control. COVID has proved to me that I’m comfortable with the market for long term goals, but it’s dog shit for an entrepreneur that likes to see their money work. I believe in the market 100% and I’ll always keep my pre-tax money in low cost index funds, but I also believe in myself and it turns out I believe in myself way more than I believe in the market.
I have had rental properties in the past and was very happy with how I did. Even had some major issues that I fixed, appliances broke, water heater flooded and I needed to replace the floor, etc. No big deal, YouTube these days and you can do almost anything and just hire a pro when it’s something critical like electrical work that I’m not comfortable with.
One of the reasons I avoided real estate for so long was the HCOL here in Northern CO. It’s stupid here and you won’t make money unless you get in the vacation rental business and that’s just not for me. I’m a lazy workaholic at my core- I look at maximum return for the least effort. At the time I was trying to solve this problem I had a new creeping problem. The running store I owned was 13 hours away in my hometown and I was getting tired of coming back to work staying at either of my parents. Not because we don’t get along, it’s just a lot to ask of older parents. Plus there is an obligation to do a lot of socializing when I’m there to work plus working remote for other jobs it’s just better to have some space of my own.
I do not make enough to afford a proper second home. Also, that would defeat the entire purpose of purchasing the running store in the first place. Why bother if there is a 3 year break even just to afford a place to stay when I’m there, doesn't make sense.
Looking at non-traditional options I found a cabin in the woods that was fully furnished for $55,000. It was adorable, secluded, hard to access, right on the water and perfect. A house in my hometown at $55,000 would have been an absolute shit hole likely with bullet holes. This is in amazing shape, a 55 minute peaceful drive to my store and everything I love about nature.
The drive is not a big deal since I’m only there roughly 6 weeks a year. We also decided that is where we will spend 100% of our family vacations. I’ve spent the last decade travelling for work. Unlike most FI/RE folks I have little to no interest in travel to foreign lands. My own little slice of secluded land where I can hunt and fish is all I’ll ever need. Henry David Thoreau once wrote “I quite think I would enjoy a quiet life in the woods.” We paid cash.
Owning a property near my hometown and the location of my business opened up an opportunity to work my savings even better. I immediately started looking for rental properties. Applying my rules of least effort for my return and looking at many properties I settled on a beautifully remodeled 3 br condo, a $130 a month HOA fee to do all maintenance and made a cash offer of $122,500. Yes, it is mathematically better for me to leverage into a mortgage, trust me I know this I’m an accountant. My decision to pay cash is a risk aversion strategy to the max. Limiting how much I pay in interest goes back to that guy who couldn’t register for a race because I had to pay interest. Now, if it takes me a couple months to find a tenant at some point it doesn’t matter to me financially. That has value to me and it’s more valuable than the leverage a mortgage provides.
A little digging found that when these do come available to rent from other investors they are getting $1,300-$1,400 a month in rent for ones that are not remodeled. I’m confident I’ll be able to get these amounts which will earn me almost a 4x return over the rental market where we live in CO. Sure, a conventional life wouldn’t be to live in the mountains full time and have your cabin in Western Illinois, but it’s the most cost effective way to have both. I’ve found most people have their vacation homes or second homes in the opposite scenario financially. They live in the less desirable places and spend big bucks on the vacation home.
6 months ago I would have never guessed all of that was the plan, but the power of saving money has opened up so many opportunities for success in my life. As of today I’m casually looking for rental property number #2 in that area and I may try to learn how commercial financing works by putting 50% or more down while keeping the entire amount in a bond fund to pay off if it gets uncomfortable for me.
FIRE is no longer my primary goal. It would be nice to be able to walk away from my CFO position at some point; for now I like the insurance, salary and it’s a super fun job, so why leave? My goal now is diversification as that is what has worked for me to survive this pandemic and in nearly every life situation I’ve experienced.
If I had only done my events business when it got very successful I would be in trouble today as we have 0 clients, 0 revenue and no horizon for when that ends. Instead, we ran the business with FI principles and that business can just be dormant.
Same thing happened when retail was shut down. The month of March is usually our 2nd best month of the year, and this year we only did orders over the phone and delivered them, we were down 90% for 8 weeks. However, since I operate with no debt, we own the building and pay for inventory in cash we bled far less than our competitors. In fact, it has allowed us to take advantage of savings on reduced price inventory.
The last 2 months has seen me getting heavily into real estate from my after tax brokerage account. We were able to get a beautiful cabin by being the buyer who offered cash. There were other offers, some for more, but they all needed financing. Being overly conservative and having a large cash cushion is such a large contributor to success. It allows you to act from a place of confidence and action. When the deal is available, whether it’s business or personal you will be able to act and act first.
From here we are back to our usual ways. Every month we max 401ks & 457s, and then save whatever we don’t spend to keep buying more rentals. At some point I’ll stop buying them, but I can’t tell you when.
Whatever is left we spend on whatever we feel like. I’ve gotten a little out of control on vehicles lately. I keep talking about how much we spend and while I really don’t keep track here is one example so you know i’m not lying:
Current cars - I don’t count these in my networth but totalled it’s around $120,000
2004 911 4s
2016 Tesla Model X P90D
1987 Volvo 760 turbo
2017 Toyota Sienna Limited
I’ll be honest, even listing those out on a FI forum is embarrassing, but before 2020 we have never made more than $100,000 in a year. I just always save up for what I want, pay cash whenever possible and put significant effort into getting the best value.
I’m not as frugal as most of the people here, and I’m very comfortable with that. As long as I’m maxing my retirement accounts and investing in my businesses then I enjoy buying luxuries, toys and conveniences all the time.
Since it’s my favorite buy on my FI track here was my process from my “Should I buy a 911” spreadsheet.
Buying an exotic sports car is unheard of in the FI community, but it shouldn’t be. If it’s truly a hobby you love then my 911 is a steal.

• 911s are the most practical sports car - back seats, total cost of ownership, community with the Porsche club of America, can be driven on track with no modifications
• 911s are very reliable compared to almost any other exotic
• 911s really hold their value after their initial depreciation
• Mine (2004 the 996 generation) is the cheapest by far of any generation and the reason is pretty much only because the headlights are ugly. 50% off compared to all other generations because of headlights…..it’s a thing, google it.(ok maybe the IMS, but it’s also fixable)
• The market bottomed out a few years ago and prices are steadily rising, making it worth even more than I paid for it
• It’s not an investment, but some research and knowledge let me punch way above my income levels for my mid-life crisis-mobile
• It’s awesome. In high school I had a picture of the 2002 Turbo 911 ripped out of a MotorTrend held up with a magnet in my locker.

I’ve owned that car for almost a year, and spent almost a year researching before purchasing it and as of today I could sell it for roughly $5,000 more than I paid. Along with that I’ve had a blast every time I drive it and spend a lot of free time enjoying it. In every purchase I make I feel it’s important to maximize your value. So far the 911 is a great example of excess American consumption done right.
If we just keep our investments on auto-pilot I shouldn’t need to work anywhere (other than rental properties) in 10 years or less, at age 45 and 40. We could do it much sooner if we really wanted to adjust our lifestyle but for now, that doesn’t seem necessary. To me that’s the beauty of the FI/RE movement. It’s personal and no matter how much or little you embrace, every little change you make will improve your financial life.
Reading individual stories is my favorite part of this community and I sincerely hope you enjoyed mine.
****I was somewhat vague on details, but at some point I gave up and figure if someone wants to figure out who I am it won’t be tough****
TL;DR - Took FI/RE principles and applied them to become a very efficient spendy pants and will still finish early.

Hi everyone, the past few months have been pretty crazy and there have been a number of posts about salary, career progression and what the outlook is like especially during a recession. I've been wanting to write up my journey into and through accounting because I was in very similar shoes about 10 years ago.. I hope my experience can enlighten potential career changers or anyone else just starting out.
Grad School - Salary $0
I decided to go back to school in 2011 when a previous career wasn't working out. This was in the middle of the last recession and I was making about $29K in a dead end job. I was 26 and had an undergrad in communications. I didn't really know what I wanted to do with my future other than I wanted a career where I could be comfortable raising a family and actually make some money. I took a shot in the dark and decided to get a masters in accounting. I think this was because I've always enjoyed economics and accounting is a very practical application of that. I also just like money in general. Like most people here, I didn't really know what a career in accounting meant. I had taken a single general business class in my undergrad and knew I needed to research my options. There was a top tier state school in my state that has a great program for people who do not have a background in accounting. I enrolled in community college to knock out some basics while I applied to schools in my state. I got really lucky and was accepted in the program at the top tier school to start summer of 2012. It was a great program, not only because it catered towards non-business undergrads but the program was essentially 1 year + 2 summer semesters. I could get in and out without racking up too much debt. The school also had excellent recruiting. I had half a dozen interviews including 3 of the big 4 in September. I got 4 offers including Deloitte and PwC. By the middle of October I accepted an offer for PwC to start the following September. This was like night and day compared to my undergrad program in communications where you were pretty much on your own to find a job. While school was hard, I enjoyed reliving the college life. I appreciated some things a lot more this time around. I graduated summer of 2013 with just enough hours to take the CPA exam. The last few weeks of summer were bitter sweet because I knew the stress of school was winding down and my new career was starting, but I also knew that the path ahead of me was going to be difficult. What I didn't realize was how fucking difficult things were about to get.
PWC - Salary $52K In September of 2013, I started with about 15 other people in our city's office. I felt a little behind from some of my piers because I did not do an internship. Looking back now that didn't really matter because nobody knows anything when they start even interns. After training, I immediately got put on a year-round healthcare client. The good thing about this client was the team was solid. There was a dude I remembered from recruiting who was hilarious and we immediately bonded. There was another experienced associate who was also a hard worker and she was very patient with me. Things were looking like it was gonna be a decent engagement. I had heard that this client got picked for a PCAOB inspection the year before and also filed 2 weeks past the SEC's deadline the year before. The manager and senior manager assured us that this was all in the past and the firm was ready this year. I was naive and believed it. Starting in early November, we started working till about 10PM because the company was restating their financials. This was my first taste of public accounting shit. I was probably putting in 65+ hours and it wasn't even busy season. The rest of my starting class was working normal hours. I could sense that busy season was gonna suck. I need to get my CPA done and out of the way. I keep my head down and try to study as much as I can. I was determined to get my $5K CPA bonus from the firm. We end up getting through the restatement and I pass FAR with a 76. Thank god I passed because I really think I might have given up in defeat if I failed. I rush to study and take BEC before the holiday break knowing that the other side was busy season. I passed BEC and spent the holidays with my family.
When I returned, the experienced associate who was my friend put in his notice to get the hell out of there before busy season started. I wasn't bitter but I was I worried. Busy season starts and I entered the most miserable 3 months of my entire life. This company was an absolute shit show. I remember that I was "in charge" of testing revenue which consisted of over 1,600 selections. Yes, you read that right. Me, a first year who didn't know substantive testing from my asshole was in charge of testing this ungodly amount of bullshit. On top of that, our testing strategy was to make the company's IA do the testing and I would "review" it . What a joke, I had no idea what was going on. We were working past midnight M-Th, 5PM on Fridays, 9-5 on Sat and then 12-5 on Sunday. This went on for 6 weeks! I was completely miserable. I had multiple managers tell me I was a subject matter expert. Ha! That was the extent of my coaching, just a bunch of shitty managers who are too busy telling me that I am expert. The only saving grace was the light at the end of the tunnel. Since this was a public company they HAD to file by the deadline. Right? The senior manager kept assuring us that there would be no late filing this year. She told me this to my face one week from the deadline with the whole fucking file was a giant dumpster. We ended up missing the deadline, and the next deadline and the company got de-listed months later for failing to provide audited financial statements.
I eventually got off of this client around April thanks to my coach who was sympathetic. I know that I was peacing out of there as soon as I passed the last two exams so I put my head back down and managed to pass REG and AUD in the summer. At that time BDO reached out to me for an interview and I decided I wanted to give public accounting one more shot. I remember getting the partner to sign off on my 1 year of experience the day I interviewed. Not long after that the $5K was deposited into my account and I left PwC.
BDO - $62K
After getting my CPA bonus at PwC, I jumped to BDO based on a referral from a friend who worked there. The main draw was getting to work on some technology and software clients. BDO was like night and day difference from PwC. The work-life balance was actually real and not just something the firm talked about. On top of that, I worked with people that actually cared about me. I was able to get on a few good clients, public and private. The actual audit work was pretty similar to PwC but slightly less BS. There was a bit more travel as my main client was about 4 hours from the office. However, the firm was very good about not making the travel jobs suck. We drove in on Monday morning and left Thursday afternoons. Busy season was also a lot less stressful. On a typical day we'd usually roll in around 8:30-9 and leave around 8:30-9. A far cry from PwC where leaving at midnight was "normal." At this point, I started to realize that working the hours I did at PwC were NOT normal even though the firm tried to make you think that.
I really liked BDO and would recommend it to anybody who wants to do public but knows they don't want to do Big4. Everyone was much friendlier and the main partner I worked with was a genuinely nice guy. I worked there for 2 years. I finished my 3rd year in public after being the senior on a few jobs including a public company that had just been acquired. I was mostly an average to good employee, but I could see the writing on the wall that public accounting was not for me. My wife also got pregnant around this time and I didn't want to travel anymore. To the firm's credit they tried to keep me there by saying they would limit my travel. After my wife gave birth, I took 4 weeks for paternity leave.
While on paternity leave, I got a linked in message from a really interesting software startup that was starting to become well known and I decided to leave BDO. At his point my salary was around $68K. I put my two weeks notice in about 5 weeks after I returned from paternity leave. BDO even made me pay back my paternity leave. lol
Startup 1 - $80K I started working as a Sr. Accountant at a "mid-size" start up around fall of 2016. I think there were around 70-80 employees. The startup was a gig startup kind of like Uber. They were mostly based out of the state I lived in, but had a small presence in other parts of the country and Canada. When I started the company was transitioning off of a third party accounting service. This company would come in for a few weeks out of the month and close the books. They were pretty expensive but I thought they did a decent job. We successfully transitioned off of them after a few months and the majority of the work they did was on my plate. About 3 months after I started the company shifted focus and pulled out of all markets that were not in the immediate region. We had some layoffs as well. It was kind of a scary time for me since I didn't know what would happen. The CFO and CEO were very open about everything though. In fact, I've never seen a more open company. Our financials were shared with every single employee in the company every month. Pretty crazy looking back, but everyone really felt like they were building something together. As cliche as it sounds it did feel like a large family.
I was part of the initial Audit for the company. This was my first time being on "the other side" it was a great learning experience for me There is nothing like having to explain the past 2 years to an auditor when you weren't even with the company. During the audit my immediate boss left and we hired a new controller. The new controller was a pretty interesting guy who I later came to respect immensely. When I say interesting, this guy wore outfits you could describe as "street wear" and was an avid basket ball player. He even wore surfer pants to his interview. The reason he could do that is because he was actually pretty sharp. Probably the smartest accountants I have ever worked with and will always be grateful for being a mentor to me. He kept an extremely tight ship with myself and the other staff accountant. He expected quality and wasn't afraid to call you on your bullshit. But he was never short on praise when you worked hard. He was also not afraid to push back on our finance team when they did things that didn't sit right. He also let the CFO know how hard the accounting team worked and went to bat for us a lot.
Our task was to create an automated accounting system for all of our transactions. I mentioned earlier that we were an app kind of like Uber. We had about 500K customer transactions a month but each of these might have multiple payouts to an independent contractor. Each customer transactions could have 4 or 5 actual transactions within it. We also ran promotions that could give different type of credits to customers that had to be treated differently. Customer could call months later to refund, or dispute. There were a lot of moving parts. I worked closely with my boss and an engineer to build out these giant tables that we could book JEs off of. It was hard work and took the better part of 18 months but sooo satisfying to see all that hard work pay off. I honestly don't think I'll do anything as complex or satisfying for the rest of my career. I could write a lot about my experience with him and the work we did building out the accounting but I dont have all day. My career owes more to my 2 years at this company and working with him than I'll probably ever realize.
While we were building this system, our company was acquired by a multi billion dollar company that is very well known. People who had been at the company for a while, like myself, got a good payout as well as decent retention bonus all based on salary and years of service.The way this was relayed to employees was by a 1:1 meeting with your department head and an HR rep from the acquiring company. I got $35K bonus that day and $7K every quarter for the next 4 years. On top of that my salary was immediately bumped to $90K. In front of this little old HR lady I blurted out "HOLY SHIT!" It felt like I had won the lottery. It was a pretty crazy day. Employees were giving each other hugs and crying. I saw grown ass adults cry. Probably the closest I'll ever get to feeling like I won the lottery.
The new parent company was pretty hands off. We had the benefits of a big company and the culture of a small company. It was the best of both worlds. I spent the next 12 months getting accustomed to inter-company accounting along with my usual duties. My boss had his first kid around this time and made plans to leave the company and return to his home region to start a family. At this point, I had been with the company for over 3 years. Without a title change. While my compensation was amazing due to the retention bonus, I felt like I was trapped. I was getting paid too much for my senior accounting role to make the jump to another job without moving up to controller. I honestly thought I was going to be there for a long time. I stayed for another year before getting a message on linkedin about a controller job. It was a hard decision to make but I ultimately decided to leave. I felt the company's culture was changing and some prominent managers had already left. I also felt like I had done everything I could there. It was time to hit the trail. It was bitter sweet because I dont think I'll ever work at such a unique place and have such a unique experience.
Startup 2 - $120K So here I am. I'm currently working for a really interesting startup as the controller. My role is work from home which is fucking awesome. I cannot stress enough how great it is to not commute. It's an extra 10 hours a week I get. My boss seems like a really great guy.The company is kind of the opposite of my last role. The revenue is high dollar yearly contracts instead of the opposite at the previous position. I'm really excited to be less in the details and work on managing the team.
So that's my life story, thanks for reading all of it. Looking back I made the right decision to go back to school. Would I make the same choices if I could do it over again? Probably, but I also got really lucky with how a lot of it played out.

Good morning
Today we are going to be covering my smallest position, in the small cap Red Violet, who are seeking to take advantage of big data.
Red Violet: Q3 Earnings Review
Red Violet had a fairly average Q3 in terms of growth. Both top and bottom line improved, on quarterly and YTD basis when compared with the previous year, but the company are still visually suffering from the impact of the corona crisis. The company do have significant exposure to the real estate market in that one of their core products, Forewarn, is largely used by the industry as a method of screening potential home viewers, and to protect their real estate agents.
Whilst growth in billable customers from their Forewarn and IDI offerings did occur, the growth was a little uninspiring. To add to that, the management earnings call was very brief. A quick overview from the CEO and CFO, and then two analyst questions and it was a wrap. This appears to be ‘normal’ for Red Violet. Looking back across the past few years of earnings calls, there have been similar length earnings calls, some longer and one with zero analyst questions. I suspect this is due to the lack of analysts covering the stock.
Anyway, lets get stuck into the earnings report for Q3.
Key Highlights
The following information will be as of FY20 Q3, unless stated otherwise. Any percentage comparisons will be on a YoY basis, unless otherwise stated.
• Revenues: $9.26 million +12.2%
• Adjusted Gross Profit: $6.56 million +60.7%
• Operating Loss: $918,000 ($1.03 million loss in FY19 Q3)
• Net Loss: $925,000 ($992,000 loss in FY19 Q3)
• IDI Customers: 5,758 +20.4%
• Forewarn Customers: 44,927 +88.3%
• Earnings per share: ($0.08)
Just as a reminder to readers, Red Violet operates two brands in IDI and Forewarn.
IDCore: Through the use of proprietary technology and large data repositories, Red Violet’s analytics and solutions hardness the power of data fusion, uncovering the relevance of disparate data points and converting them into insightful and useful views of people, businesses, assets and their interrelationships. The allows clients who use the data to better understand and execute all aspects of their business, such as risk, debt recovery, fraud and abuse, legislative compliance, and identifying and acquiring consumers.
Forewarn: This solution provides instant knowledge, prior to a face-to-face engagement with a consumer to help professionals better understand and address risk. Forewarn is an app-based solution and is currently tailored towards the real estate industry.
For further insight into the operations of the company, as well as the markets they operate in, you can check that overview newsletter I linked back in the introduction.
In terms of any new additions to the company, in relation to any new products or services, Derek Dubner , CEO stated that:
“We have a robust road map of new technologies, enhancements, functionality and products and solutions that will drive our business near and long term. And given the substantial inroads we are making with new customers, combined with the recovery of existing customers and pent-up demand, we are well-positioned for the remainder of the year and throughout 2021.
Data is the lifeblood of this digital transformation, but not just volume of data as too much data creates noise and inefficiency. Too much data creates fragmentation and the inability to glean actionable insight. Our mission is to continue developing and commercializing customer-centric solutions that solve for the data fragmentation problem, no matter the customer or the use case.
Our goal is to ensure the applicability of our solutions across as many industries and transactions as possible to increase organization's output and efficiency. We are very early in this mission and are well-positioned for the future.”
So nothing announced as of yet, but I am sure there are other uses for the data that Red Violet purchase, it will simply take time for them to locate one that is most suitable for their business model.
Clearly the company witnessed some cost cutting impacts from the perspective of their consumers during the initial outbreak of the crisis. Q2 revenues were fairly weak, but this was expected to be temporary. Revenues recovered somewhat in Q3, totaling $9.26 million, which is up 31.3% sequentially from the $7.05 million in the previous quarter.
Derek Dubner, CEO, made note of the impact from Q2 and how they targeted certain customers during the panic in the quarter. He stated that: “Another facet of our strategy was to use the crisis as an opportunity to increase our market share. We posited early on that in order to cope with the economic downturn, businesses would seek to cut costs immediately and identify greater efficiencies to implement into their workflow to offset the negative financial impacts to their business. We focused on these prospects who, as a result of the downturn, exhibited a greater propensity to entertain switching providers.”
IDI customers were up 20.4% year over year, totaling 5,758 in Q3, adding 383 new customers from Q2.
Forewarn customers were up 88.3% year over year, totaling 44,927 in Q3, adding 4,070 new customers from Q2.
There is not a wealth of updates or highlights to be seen here for Red Violet. Some nice growth across each of their platforms, and some rejuvenation of their revenues on a sequential time frame. I think the most insight will be learned from the study of their financials, so lets get stuck into that.
Performance
Revenues increased 31.3% sequentially fromQ2, showing the improvement. On a year over year basis, the $9.26 million revenues for Q3 increased 12.2% from the $8.25 million in FY19 Q3. Those revenues are of course split across platform and services revenues. Platform revenues grew 27% to $9 million for the quarter, reflecting 97% of total revenues. With the exception of the collections vertical within Red Violet’s services revenue, the company saw a nice recovery in transaction volume across the board, including some pent-up demand as businesses adapted and became more efficient operating in the COVID environment.
In terms of the services revenue, the recovery of their collections vertical has been slow, resulting from temporary government-imposed moratoria, forbearance programs and government stimulus. As such, services revenues decline 74% in the quarter and stood at $0.3 million. Management state that due to strong tailwinds, expected to develop throughout 2021 as the moratoria are lifted, that the services component of revenues will recover in early 2021.
The $9.3 million revenues for the third quarter, consisted of revenue from new customers of $0.7 million, base revenue from existing customers of $5.8 million and gross revenue from existing customers of $2.7 million. So, there is an element of recurring revenues here. Note that rounding gets us to $9.3 million, if you were wondering why it only adds up to $9.2 million.
Revenues for the year thus far stand at $25.62 million, up 20.6% from the $21.23 million reported in 2019. The company continues to grow revenues despite the ugly Q2 that they experienced. Granted, 20.6% is not exceptional for a small growing firm like Red Violet, but I feel it is suitable given the circumstances of this year.
Adjusted gross profit for the quarter was $6.56 million, up 60.7% on the year, which is an adjusted gross margin of ~71%. When we take a look at the actual gross profit, not adjusting for depreciation, we get a gross margin of ~59%, which is an improvement from the 54% reported last quarter.
Cost of revenue decreased $0.4 million or 13% to $2.7 million for the three months ended September 30, 2020 from $3.1 million for the three months ended September 30, 2019. Red Violet’s cost of revenue primarily includes data acquisition costs. Data acquisition costs consist primarily of the costs to acquire data either on a transactional basis or through flat-fee data licensing agreements, including unlimited usage agreements. The decrease in cost of revenue was primarily attributable to the decrease in transactional based data acquisition costs associated with the reduction in their idiVERIFIED services revenue. Management state that they continue to enhance the breadth and depth of their data through the addition and expansion of relationships with key data suppliers, including their largest data supplier, which accounted for approximately 48% of their total data acquisition costs for Q3 compared to approximately 40% from the previous year.
Other cost of revenue items include expenses related to third-party infrastructure fees. As the construct of Red Violet’s data costs is primarily a flat-fee, unlimited usage model, the cost of revenue as a percentage of revenue decreased to 29% for Q3 2020 from 38% for Q3 2019. They expect that cost of revenue as a percentage of revenue will continue to decrease over the coming years as their revenue increases and they can leverage that fixed cost model.
Sales and marketing expenses increased $0.3 million or 15% to $2.2 million for the third quarter from $1.9 million from the previous year. Sales and marketing expenses consist of salaries and benefits, advertising and marketing, travel expenses, and share-based compensation expense, incurred by the sales team, and provision for bad debts. The increase during Q3 was primarily attributable to a $0.3 million increase in salaries and benefits, as the company continues to invest in the expansion of their sales organization, and sales commissions from increased revenue.
General and administrative expenses increased $0.6 million or 19% to $4.1 million for Q3 from $3.5 million from the previous year. The increase during Q3 was primarily attributable to a $0.4 million increase in share-based compensation expense.
Depreciation and amortization expenses increased $0.3 million or 49% to $1.1 million for Q3 from $0.8 million from the previous year. The increase in depreciation and amortization for the quarter resulted from the amortization of software developed for internal use that became ready for its intended use after Q3.
Overall loss from operations for Q3 stood at $918,000, a slight improvement from the $1.03 million reported last year. For the year, operating losses are $$4.96 million, another improvement from the $6.34 million loss in 2019.
Net losses stood at $925,000 for the quarter, an improvement from the $992,000 reported last year. Net losses for the year thus far also improved, standing at $4.93 million in 2020 versus $6.22 million in 2019.
Overall, some improvement, but the extent of that leverage of fixed costs is yet to be fully realized yet. Next year, 2021, will be interesting for sure, provided there is an ease of lockdown measures.
Liquidity
Losses are fairly small, and liquidity looks fairly good. Red Violet currently have a total of $7.89 million in total obligations due, with around $4.75 million of that being due within the next year.
Cash stands at $12.44 million, which is more than enough to cover any current obligations, as well as their entire outstanding obligations. In total, Red Violet have around $15.98 million in short term liquidity at their disposal. Considering they burn ~$10 million in operational costs each quarter, and have $15 million in liquidity plus around $9 million in sales each quarter, this looks manageable for the time being.
In relation to cash burn, MacLachlan stated that things are looking a little more promising in that they are no longer burning cash in Q3, an are instead earning cash. See the below for more flavor on that.
Daniel MacLachlan, CFO, stated that:
“Internally, we track our operational cash burn versus burn on a monthly basis by calculating adjusted EBITDA and subtracting the cash we use for the development of internal use software and other capital expenses, both found on our statement of cash flows. Based on this earn-burn analysis, we earned $0.8 million in cash for the third quarter 2020 compared to burning $0.4 million for the third quarter of 2019.”
Red Violet currently have $2.15 million in loans outstanding, as part of their COVID Cares Act borrowing, with $1.05 million due within one year, and then the remaining $1.09 million due before 2022.
It is possible this loan may be forgiven however, in that they may not have to repay it. The Loan may be forgiven partially or fully if the Loan proceeds are used for covered payroll, rent and utility costs incurred during the 24-week period that commenced on the date of funding (the “Covered Period”), and if at least 60% of the proceeds are used for covered payroll costs. Any forgiveness of the Loan will be subject to approval by the SBA and the Lender. The Company will be required to apply for such forgiveness within 10 months after the Covered Period. Because the Loan exceeds $2 million Red Violet anticipates the U.S. Department of Treasury will audit the loan.
Although Red Violet used the proceeds of the Loan for such covered purposes and intends to apply for forgiveness by the end of December 2020, it can provide no assurance that the Company will obtain forgiveness of the Loan in whole or in part.
There are also some operating lease liabilities scheduled to mature over the next few years, but nothing that appears to severely impact liquidity in the near-term. With $178,000 due over the remainder of 2020, $724,000 in 2021 and $743,000 in 2022. You can find the remaining maturities in the below table.
There is also the matter of capital commitments the company has in place, with $1.74 million due in 2020, and $5.6 million due in 2021. These commitments are fairly steep in relation to the current cash flows are the business, so it will be interesting to see if they can beef up revenue in 2021 to support these commitments.
So there are a few things to keep an eye on from my end, but in the near term, liquidity looks good for now. Happy with that.
Cash Flows
Cash flows from operations stood at $4.75 million for the 9 months of 2020 thus far, up from $435,000 last year. Cash flow of $4.75 million was primarily the result of the net loss of $4.9 million, adjusted for certain non-cash items like share-based compensation expense, depreciation and amortization, write-off of long-lived assets, provision for bad debts, and noncash lease expenses, totaling $10.3 million, and the cash used as a result of changes in assets and liabilities of $0.6 million, primarily the result of the decrease in accrued expenses and other current liabilities and operating lease liabilities.
Share-based comp of $6.4 million is pretty steep, but not unheard of in small companies. The company state that they use SBC to incentivise the best talent, as well as retain them, in the company. I can live with it for now.
Free cash flows stand at $4.6 million for the year thus far.
Outflows from investing activities stand at $4.4 million for the year thus far, largely due to capitalized costs from intangible assets.
Inflows from financing for the year stand at $324,000 after the $2.15 million inflow from their loan via the CARES act, and offset by the $1.82 million in taxes related to vested stock units.
A Few Notes from the Call
Here i wanted to share a few interesting quotes from management during the conference call. During the question and answer session.
I have cherry picked some of the responses i found most interesting and useful for you.
One thing that is worth noting, is that the earnings call for Red Violet are super short. I do suspect that is likely due to the lack of analysts covering the company, therefore the number of questions were lower. There were literally two questions in the entire earnings call. The two questions below, are the entire question segment.
QUESTION: “Yes. So it looks like you had some really strong growth in revenue from existing customers as well as decent growth from existing customer base revenue. However, the revenue from new customers was down over prior year. Can you explain why that is? And if there is any concern there?”
DANIEL MACLACHLAN, CFO: “Thank you for the question. This is Dan. Yes, so as I discussed in my commentary earlier, our gross revenue from existing customers was very strong, both sequentially and over prior year. This is a healthy sign for the business as it tells us customers who have been with us longer than 6 months continue to grow their volumes. It tells us that our customers continue to rely on our solutions, both in their everyday workflow and as a means to help drive their business as they get back to business.
As for the new customer revenue, we are very pleased with how the numbers are trending. What we're really seeing in this metric for the third quarter is really a result of the second quarter COVID trough where we saw fewer billable customers added, resulting in less revenue generated from new customers in the third quarter. Looking at the onboarding of over 380 billable customers in the third quarter, which is at a higher onboarding rate than our 2019 average, it really tells a story and provide a very healthy leading indicator of future revenue. So we continue to see customers who adopt our solutions grow in scale and volume over time, combining that with our low attrition rates and where -- we are very confident in the overall makeup of our revenue. And so we're confident today in how and where that revenue is growing and how it is trending.”
QUESTION: “Good quarter. It's just kind of more of a technical one in terms of your internalized software and depreciation. And kind of where are you -- that grew significantly in terms of what you're capitalizing. Kind of where is the run rate to expect? And maybe give us a little update on what the trend of that will be.”
DANIEL MACLACHLAN, CFO: “Yes, sure. So the last few years, we've been running about $6 million a year in capitalization of internally developed software. We've added additional resources and product development. But over time, some of that development goes towards kind of the maintaining, if you will, the system and so you don't really capitalize that.
So from a trending indicator standpoint, you'll probably see, over the next year or 2, very similar capitalization of about $6 million. But as a result of kind of overall revenue and overall time, it's actually decreasing. But on a dollar-for-dollar basis, it will trend around $6 million yearly over the next probably 1 or 2 years.”
FOLLOW UP QUESTION: “Yes. So you'll start to get some -- you -- with a 40% increase, you're kind of at where the number will be. So incrementally from here, you'll be able to leverage that number?”
DANIEL MACLACHLAN, CFO: “Correct. And that is the unique fixed cost structure, if you will, of the model that provides us so much leverage.”
Forward Guidance
The company issued no guidance for next quarter or FY21.
Summary
So Red Violet for me represents a 2.63% weight in the portfolio, making it the smallest position overall, as well as being the smallest market cap in the portfolio at ~$270 million as of November 20th.
The thesis still remains in tact, but with the nature of the company being fairly infantile, it might take a while before much moves. I have utmost patience in this one, provided none of my sell triggers are activated.
Fundamentals remain suitable, liquidity is good, and their products are still growing. The lack of discussion in the earnings calls are disappointing , but that is part of the parcel of investing in smaller cap names.
During 2021, it would be nice to see what a full year of smoother operations look like, with some recovery in that services segment. The fixed cost model should allow for some attractive leverage in terms of gross margin if they can inflate their revenues over the next year or so. Overall, I would hope for a far stronger 2021.
Overall, a fairly average quarter for me, 5 out of 10.
One to watch, for sure.
Until next time and HAGW!
IT