Early Retirement Extreme Forums

jacob wrote: ↑

Fri Jun 07, 2019 9:47 am

I'm thinking of concentrating instead to make a bigger impact, i.e. instead of giving 100 people $1/month, I'd give 1 person $100/month.

Perhaps it would make sense to have a few rules of thumbs in that scenario to maximize the value add of your money. It seems like it would make sense to target producers that have only a single source of income through patreon (and no other source of monetization/advertising/merch), and to have their sponsored amount as public with a value of under $900/mo.

If you are considering charity, rather than just following personal preferences, you could look into effective altruism: https://en.wikipedia.org/wiki/Effective_altruism, https://www.effectivealtruism.org/

2Birds1Stone wrote: ↑

Fri Jun 07, 2019 9:48 pm

I actually worry that too much $$ can make you soft. IE outsourcing so many things that you only know how to do the one thing that takes all of your time. Also, becoming too reliant on monetary wealth for the rest of your lifestyle to work.

The other side of this, is by outsourcing chopping wood and carrying water, you can take on more stimulating endeavors. Breaking new ground, mentally or physically, gives you a different form of resilience. It's not like you'll forget how to scrub a toilet or buy an avocado.

Take some rough math - let's say outsourcing grocery shopping saves 30 minutes a week. For someone with 40 years left, that is 1000 hours of productive time bought back. Considering 2000 hours per year is the rule of thumb for a full time work, that's a lot of opportunity.

I am finding work takes on a completely different dynamic in the context of my "inflated" lifestyle. Since I control large portions of my work, I get exposed to new ideas and challenges weekly. However, unlike when I was early in my career, I also have free time. My weekends aren't just a scramble to be ready for the work week. That quality of life makes me more effective, giving me more control, reinforcing the cycle.


In this context, weekly help makes a ton of sense - let's say 4h per week. I think what holds me back, is a desire to avoid adding another relationship committing me to work. At 200h per year, your're talking someone counting on me for $4-5k of income. Eventually cutting that off, when I am ready to retire, creates hardship for them. If the relationship is good, I may be reluctant and feel stuck.

I think this is an artificial mental barrier I am letting hold me back. In practice, outside of the lifestyle benefits, it could pay for itself in two ways:

1. I perform better at work, gaining a pay raise or bonus to immediately offset the annual cost
2. Working is so easy that I do it for more years, maybe long enough to pay for the help in perpetuity

FrugalPatat wrote: ↑

Sun Jun 09, 2019 12:30 am

If you are considering charity, rather than just following personal preferences, you could look into effective altruism: https://en.wikipedia.org/wiki/Effective_altruism, https://www.effectivealtruism.org/

It kind of surprises me this is not discussed more in this forum. With so much misery in the world, the last thing I will have problem with is how to "spend" money.

@Scott2 - Another "defense" would be that outsourcing these jobs distributes money in the economy. When I was looking at potential central/south-American countries to live in, I got the strong impression that insofar you could afford it, it was practically mandatory to hire a gardener, maid, etc. to spread the wealth rather than insisting on doing things yourself. But as you mention, this does create a relationship with entails some expectations. Kinda jars with innate senses of individualism (arms-length transactions), so it depends on the culture.

One of my neighbors do the same thing, hiring people if they need money. It's a way to support the local economy and build tremendous amounts of social capital. Speaking of that, one of the things I/we do albeit not very consistently is to shop at the local supermarket/cornerstore instead of driving off to Aldi. It's a little bit more expensive that way but what with the savings on CO2 and the fact that I do appreciate the diversity of the local economy. Likewise, when we need plumbing, electric, ... we try to hire around the neighborhood even if costs (sometimes quite a bit) more.

There are plenty of ways I could spend more if I had more, that I don't consider wasteful or charity.

- I would spend more money on more mature plants to speed up my gardening/landscaping rather than waiting longer to see results from tiny cheaper plants.
- Increase the efficiency of your home. Maybe doubling up on attic insulation for example would have an ROI worse than investing, but who cares if you have the extra cash and the materials will have a greenhouse gas payback period less than the life of the product. Hard to calculate that but e.g. mineral wool insulation is recycled from slag waste and shouldn't degrade over time so it should last the life of the structure and save more GG than it emits in making it.
- Get more BIFL items / high quality items even if you don't think you use them enough. Maybe with the higher quality you will want to use it more. If not it should be in good enough shape for future generations to use it.
- Throw a party for the neighborhood. You can spend a tidy sum on good catering. Could be wasteful (paper plates etc.) but so is everything else your neighbors would have been doing in their free time, probably.
- Buy local as Jacob said. Fresh milk from down the road costs twice as much as supermarket milk. I would want to support the local dairy, farms, and restaurants more.
- Buy up raw land in your area that would otherwise be bought by a developer and let it stay wild. This is not an investment if you don't plan to sell it as it will only cost you further each year in taxes (unless you get out of paying tax by conserving the land). This is a big one as you could extend it further to buy up tear downs and pay a lot of money to convert them to something else like food forests or an ERE village.
- Start a business even if it has a low probability of success, or make it a non-profit. Even if it is for profit, if you are loaded you will be less stressed than your competitors whose lives depend on their success.
- Start a PAC to influence politics in the direction you want. Or fund your own campaign for office. Give donations to the right people to exploit the corrupt system, but for good.
- Buy a controlling number of shares in a company you think is too big and then split it up.

The sky's the limit depending on how much you want to change things in your household/neighborhood/locally/nationally/globally. Even if I had billions I would find ways to spend it to change the world how I see fit.

@Jacob - I have found people resist the idea that a "rich" person paying others to serve them can be positive. I avoid making that argument but do agree with it.

In my experience, individuals doing the work are happy to earn money. Especially when they are treated as a peer providing a service, rather than as "the help".

As an example - our housekeeper gets the company rate for a service, but we pay her directly. She comes on her schedule. My wife is friendly with her - they'll chat a little and know things about each other's life. We pay an extra $100 around the holidays.

However, I am a rich white male who was born in the US. Typically the person providing a service is not. The reflection of American society as a whole is glaring. As a result, I tread very lightly on claiming the relationship as mutually beneficial.


I avoided charity in this discussion, because effective philanthropy is so complex. IMO it is better treated as a goal than as an expense.

Lucky C wrote:- Buy up raw land in your area that would otherwise be bought by a developer and let it stay wild. This is not an investment if you don't plan to sell it as it will only cost you further each year in taxes (unless you get out of paying tax by conserving the land). This is a big one as you could extend it further to buy up tear downs and pay a lot of money to convert them to something else like food forests or an ERE village.

+1

The coolest would be conversion of some horrible strip mall parking lot.

I would also distribute free copies of my favorite books to children.

My "ex" who grew up wealthy in Tehran had family retainers for whom he felt some degree of responsibility. He loved his nanny and would have been happy to support her, but his father gave her son enough of a leg up that he was well able to care for her, so it never became necessary. The woman who cared for his parents in their final years pretty much demanded some sort of pension, but something less was proffered and accepted. Of course, in a culture where wealthy men are also sometimes fully financially responsible* for multiple wives, this is sort of a natural extension.

*This level of responsibility is sometimes offered as reason behind laws requiring husband's permission to leave country. As in "who knows what kind of bills she might rack up shopping in Paris!"

Thank you for all your responses and ideas. I am looking into some of them. I knew charity will be one of the first things to pop up in the discussion. I have conflicting views on standard charity organizations and I haven't made up my mind about it.

jacob wrote: ↑

Fri Jun 07, 2019 9:47 am

... My approach is to divert the surplus to other productive people rather than finding ways to waste it myself. In my case, I've started diverting it to Patreon. I primarily support people whose work would be hard to monetize under the current ad-based/affiliate/selling stuff-paradigm... because I empathize with these people ...

This idea here is something I will start doing. There are lot of people out there producing things I benefit from and they are not charging for it. Open-source software and free education comes to mind.

Fish wrote: ↑

Fri Jun 07, 2019 1:35 pm

As the marginal utility of saving diminishes, I’ve been:

• Increasing my inventory of consumables (e.g. non-perishable food, dress clothes for work) as opposed to minimizing the quantity purchased to limit carrying costs.
• Buying higher quality products, tools and parts.
• Occasionally buying convenience when able to fully appreciate its luxury.
• Tolerating small monetary losses resulting from “bad luck” instead of becoming agitated and fighting each one.
• Traveling to spend time with family and friends.
• Donating to local organizations I support.

....

"Increasing my inventory of consumables" is something to which I could allocate part of the money. Ideally I will like to buy all my future food, medicines, shoes, cars, gas, education, corndogs or toilet paper right now that I have the cash but I haven't seen the way to do it effectively. Futures contracts could be great if the were not a financial instrument based on trust on financial institutions. I am not prepper, but I have started looking a little bit more seriously into that way of stocking up. I started buying quality tools and durable stuff long ago.

There is one thing I am getting out of the surplus money. I don't care about money much lately. If I have to 'lose' some money for some reason, I don't double think it. Like you say, I don't fight it, I just keep going like nothing happened.

I am even considering to stop keeping track of income and expenses... but I like the graphs so much...

prognastat wrote: ↑

Fri Jun 07, 2019 9:16 am

...
Another option that might make your life better is if you live a decent distance from work use the extra money to buy a place much closer to work. I can tell you not having to spend time in traffic every day makes my days much better.

I live in a sweet spot between work, friends, family, etc... Moving is not something we are considering right now. Maybe in the future I can consider something out of the city, but not anytime soon and I am not sure it would be much more expensive.

Scott 2 wrote: ↑

Fri Jun 07, 2019 12:42 pm

I'm in a similar position. What I am trying to buy:

Time - grocery delivery, food delivery, housekeeper, Uber, tradesmen, product subscriptions, limiting comparison shopping, not bothering with coupons or sales, etc.

Saying no - this applies most strongly to my job. I focus on the good parts, tactfully decline things I don't want to do, ignore boring problems I might have previously jumped in the middle of.
....

The idea of buying time is something I will also try to apply. Grocery delivery of some the shopping we can do for a start. I will discuss it with DW to try to get more ideas.

The reason to switch jobs was precisely to be able to say no to things I am not interested in. Still, I do some of such tasks out of... I don't exactly know why. Yes, I have to remind myself to say no more often.

bigato wrote: ↑

Fri Jun 07, 2019 1:24 pm

I'm still a bit confused as to why you feel you *need* to spend more. For most cases this is quite simple like set up a will, donate to a cause, etc. But I think you have another point in there. Could you elaborate?

I don't think this captures everything, but this is my try:
It is the fact that money is doing nothing there, it is completely unproductive and I can not foresee any situation in which I could use it. I could quit and I wouldn't need it (that's why I don't want to invest it). You could think the lower the SWR or any other similar metric you like the safer you can feel in retirement. I think that I am at a point in which lowering my SWR has, as they have mentioned here, very marked diminishing returns for me (the 3% I mentioned was just order of magnitude, it is certainly lower than that). In fact, I think that if all this plan (i.e., ERE) fails, it needs to do hard and loud in a way that no SWR will save us. The way we have set up everything is resilient but it will fail in scenarios like super inflation, government asset takeover (gradual or not), war, etc. In those cases, no big portfolio will work. (BTW I don't like physical gold, I don't trust its value and won't buy it). What I want to say is that the risk inherent to investing this surplus money is not worth the return I can get from it.

Sclass wrote: ↑

Fri Jun 07, 2019 7:53 pm

Great topic. I’m currently talking to my father about his estate plan. He’s in his 80s. Terminally ill. And he hasn’t spent enough money yet (according to him).

He has lived frugally all his life and now accumulates money for the sake of accumulating money. He doesn’t need anymore cash. His income exceeds his expenses by 5x right now. When I pulled him aside in May and suggested we start getting things in order he said what he usually has said over the years “Wait, I think I’m going to start spending my money.” It has recently changed to, “wait, I’m going to spend some of it, but perhaps I’ve waited too long.”
....
I think FFJ mentioned recently that buying most things doesn’t give him the satisfaction it once did. I’m there. It’s really hard to find anything that adds more value. Yet I worry about a moment in the midnight hour when I realize I have a ton of unused wealth that I feel I need to spend while I’m wasting away in bed wheezing through an O2 mask on my face. And, all I can do is think about spending my money

I am living a quite parallel situation although probably not so imminent as yours. It is exactly what gave rise to all these doubts. In fact, it is with my parents with whom I discuss this situation the most. They have the same problem as me and I don't want to see myself there when I am 70. Some people will not believe it, but it is a quite complex problem.



Recalling the idea of the renaissance man... I am healthy, I am handy with tools (or so says DW), maybe investing to improve my social network is something I can deliberately start doing...

Sorry for the messy answer.

Really? Losing sleep over how to spend money? Poor Jeff Bezos. Even after giving up half of his fortune for a new piece of ass he's probably tossing and turning all night worrying about dying with billions left in the bank. This is just a bunch of humble bragging bullshit. If cancer kids or AIDS awareness or hospices or the Amazon forest or your great great great grandkids or homeless fucking parakeets or a personal chopper doesn't float your boat maybe you can grow it even more and do like incredibly stupid shit with it. Either way, the world will carry on.

https://www.youtube.com/watch?v=gO9PwbtlOIU

I don't have this problem. My wife just spends it

Kidding aside....we save for vacations now which is something we did not do in our previous 5 years of marriage. Being prior military and seeing many different countries, I never felt a need to travel but my spouse wants to see the world. A fair compromise was made. Perhaps I'll even have a different perspective being able to travel for pleasure rather than for work.

Interesting question and a lot of good advice here.

If you are happy with your current spending but still want to spend more, the two things that come to mind are health and time.

Health - this one is a no brainer really - there's no better investment. Some ideas on how to 'buy' better health:

• better quality food - if you're currently buying in a supermarket, make sure it's all organic. It's only very slightly healthier, but if money is not a problem, there's no downside.

• exercise - subscription to the best/closest gym and a personal trainer

• supplements - your diet should really cover that, but if not, get the best on the market

• massages - great for reducing stress

• premium healthcare with regular check-ups; blood and other stuff checked every 3-6 months

• move far away from pollution

Time - like most of us, you probably waste quite a lot of time every day doing work at home (washing dishes and other nonsense).

• outsource all of that and enjoy your free time with family or however you prefer

• delegate any tasks your wife/kids are capable of doing to them and pay them if necessary

• negotiate work from home

• move closer to work to save commute time

• introduce a rule in your life that you won't worry about money disputes up to $x (e.i. if you order something online and it's crap, but only cost you $25, just bin it rather than go through a hassle of contacting the seller and/or sending it back)

• basically, look at every regular task in your life and ask yourself if you enjoy doing it, or is it work, and if the latter, pay someone else to do it

Interesting thread as this is something I need to think of more...random thoughts:
• I struggle to outsource things I dislike doing as it is good practice approaching life with more equanimity. Otherwise, I tend to become more egocentric too.
• I also distinguish between being able to help financially and whether it is the correct course of action. For example, DH’s mother is a spendthrift and always looking for a handout due to the emergency of the day. Giving her money would enable her behavior. We offer help in the form of money management, either from us or elsewhere (book, class, etc.), which is never accepted.
• +1 to supporting locale businesses

Cool, Folly building looks fun. Some were built to provide employment for locals during recessions or famines. Like https://en.m.wikipedia.org/wiki/Conolly%27s_Folly

What you are talking about is desire for more. Everyone has the desire for more, but not everyone has the means to buy. If you are not content with what you have, buying what you want, as long as you have a standard of financial strength that you are not violating, is ok. But realize, you'll never satisfy your desire for more.

Bankai wrote: ↑

Wed Jun 12, 2019 12:42 pm

• better quality food - if you're currently buying in a supermarket, make sure it's all organic. It's only very slightly healthier, but if money is not a problem, there's no downside.

I've heard from various people that organic food is not only not better in terms of health, it is worse in terms of resource consumption than "normal" food.

Frita wrote: ↑

Thu Jun 13, 2019 8:44 am

I struggle to outsource things I dislike doing as it is good practice approaching life with more equanimity. Otherwise, I tend to become more egocentric too.

I think your perspective is well aligned with the wisdom offered by many spiritual traditions.

I have learned from going the other direction. My instinct is to do everything myself, with exacting standards. When I count on others, I am forced to release control. Shifting my instinctive response of "this isn't perfect!" to appreciating another's labor, is really hard.

Internally, I still slip. Externally, I try to do better. I meet the instacart driver, make eye contact and small talk, help carry the bags, thank them, provide a 5 star rating, double the promised tip if it's even close to correct, etc. It has required growth on my part.

My wife would say - "you don't deserve praise for being a decent person".

tjh wrote: ↑

Fri Jun 14, 2019 4:44 am

What you are talking about is desire for more. Everyone has the desire for more, but not everyone has the means to buy. If you are not content with what you have, buying what you want, as long as you have a standard of financial strength that you are not violating, is ok. But realize, you'll never satisfy your desire for more.

I've found it hard to balance this perspective with cherishing the finite days I will live. Yoga and meditation work for me. I spent several years at peak happiness, hiding on a yoga mat. My days consisted of work, exercise and frugal living. It didn't matter what life threw at me, I could go internally and flip the switch.

I eventually decided it was a mistake, an avoidance of the human experience. I do more things now. It's expensive. I have more lows. My highs are no greater. My average daily satisfaction is reduced. But, I am drinking more fully from the world. For me, that resonates.

Scott 2 wrote: ↑

Fri Jun 14, 2019 11:50 pm

It didn't matter what life threw at me, I could go internally and flip the switch.
I eventually decided it was a mistake, an avoidance of the human experience.

This resonates with me and maybe deserves a thread topic of it's own. At one point in life, I spent a great deal of time developing stoicism. I still love it, and it has it's place in situations where nature provides us with a horrible tragedy or in emotionally charged critical moments where rational thought is required for definitive action. However, it's only one tool in a toolbox, and it's one that can be overused. I'm not sure what, if any purpose this life has to offer. I do know that nature has created a world where human experience requires us to sometimes feel gut wrenching sadness, blood boiling anger, or ice cold fear so that we can remain healthy and balanced within its boundaries.

@classicalliberal It begs the question as to whether there is an optimal amount of suffering one should have in life in order to maximise their lifetime utility. Somewhat like getting a bad cold might give you some immunity to a deadly strain of influenza.

Bankai wrote: ↑

Wed Jun 12, 2019 12:42 pm

outsource all of that and enjoy your free time with family

See, people say this shit all the time, but it must come from a place of scarcity. But what if OP isn't in a place of scarcity? Some people would actually do anything to see LESS of their family. See, e.g., financial samurai. Marginal utility and all. The trick is that you can embrace marginal utility even before you get sick of your family.

Anyway, @OP, so, you have too much money, good for you. Why don't you just stop thinking about it? Spend it, bury it, burn it, shit on it, who gives a fuck? Your marginal utility is zero. But let's be clear about the subject of this marginal utility - the zero marginal utility relates to thinking about what to do with this tool that you've been fondling for years (i.e., money). That means...time to move on. There are other things to watch than financial porn. Here's what you do, in the order that you do them:

1) Do the things you already know you enjoy up to the amount that you still enjoy them (including family).
2) With the remaining time, try something new you've always wanted to try.
3) If no burning desires, try something new. Anything. It doesn't matter. You're a bored monkey and you need stimulation. So stimulate.
4) If you don't feel like doing any of the above, do nothing.
5) When you get tired of doing nothing, or get tired of doing something, go back to step 1.
6) The only way to break this loop is to die.

I call this your personal-life-satisfaction-efficient-frontier (TM). Catchy name, I know.

johnC64 wrote: ↑

Fri Jun 07, 2019 9:13 am

I have these opposite feelings of need to make use of the forever idle money and of not knowing how to do it. It is like my frugality is working against me. I am not talking about spending a little bit more occasionally, let's say I would like to double it indefinitely to have peace of mind.

You don't need to do anything with your money to have peace of mind. Just stare at that so-called "feeling of need", give it its space and watch it disappear of its own accord. At this point your money is in control of you rather than the other way around. Which is...ironic? sad?