Life Traps Analysis from WSP

[BRUTE]

redacted for reasons of civil discourse

[BRUTE]

doubling income is probably not possible in all jobs. in fact, it will almost certainly require job changes, maybe even vocation changes. in many professional jobs it is common to "only" receive 1-5% raises each year, but much bigger ones when switching jobs. thus the most frequent job-hoppers tend to make the most money.

if a human were stuck in a career or vocation that won't allow more money, but really wanted more money, he could always become a freelance plumber, carpenter, or truck driver. these typically allow high work hours/overtime, and with a little dedication, opening a business within a few years. then the 6 figures are very possible, and there are a few dedicated ones that make way more than that.

intelligence in the academic sense might not be what makes it possible for these humans to do what they do. it might be more of a work capacity/drive thing.

[prognastat]

It definitely takes a lot of one of the two and a decent bit of the other to compliment it and a decent bit of luck.

You can either be super driven and reasonably intelligent or super intelligent and reasonably driven.

If you have both of course it's even better.

If you have neither you will be extremely unlikely to make an above average income unless you get extremely lucky.

[Stahlmann]

freelance plumber, carpenter, or truck driver. these typically allow high work hours/overtime, and with a little dedication, opening a business within a few years. then the 6 figures are very possible, and there are a few dedicated ones that make way more than that.

Citation needed

[jacob]

@Stahlmann - https://www.mrmoneymustache.com/2013/07 ... ee-part-1/ as long as you show up on time and run a company. One trap is being smart while trying to make your fortune working white collar. Try going where the competition is easier and maybe only requires the ability to show up on time or doing simple calculus, such as plumbing or high finance... which are disturbingly similar when it comes down to it.

[BRUTE]

freelance plumber, carpenter, or truck driver. these typically allow high work hours/overtime, and with a little dedication, opening a business within a few years. then the 6 figures are very possible, and there are a few dedicated ones that make way more than that.

Citation needed

this might be a US only phenomenon. brute apologizes.

[trailblazer]

I wonder what would happen if a 53 year old female attempted to enact this system?

It would be the greatest journal ever.

[prognastat]

@Randy

I started using Mint then switched to using Personal Capital, now I use both but for other uses.

Personal Capital works better for my investment tracking and is very good about their customer service.

Mint has the better budgeting tools so I only have my regular bank account linked to this and use it to categorise and track income vs spending.

[Peanut]

@jacob

I used to think similarly about academia too, but then I met some crazy over-achievers. Like, a guy who did get 2x stipends some years of his time in grad school because he was doing double PhDs. And my advisor who was being paid “above scale.” I definitely knew of a few other professors who skipped the associate stage and were promoted directly to full when they wrote blockbuster books (research not creative writing). A big chunk of elite universities really have a star system these days—their own 0.1% who are remunerated accordingly and never have to teach.

When I was still applying for summer grants I was told “money attracts money.” Get one grant, and you’ll get a lot more. The MacArthur grant is 3 million. That’s quite a ceiling!

[Fish]

@Randy - WSP’s Personal Capital link is an affiliate link in case it wasn’t clear already. They make their money through an advisory service charging 0.9% of AUM, but that is optional and it is free to use the tools. See a full review here (along with someone else’s affiliate link ): http://jlcollinsnh.com/2015/10/07/perso ... and-funds/

I’ve never used PC, and my Mint account has been untouched for 7 years. I enjoy making my own spreadsheets and doing my own calculations. However, I don’t really care about tracking anymore.

[jacob]

@Peanut - Sure, but those are unicorns(*). There are more Olympic gold medalists than MacArthur winners. We're not talking 1 in 10 here, but more like 1 in 20 for the 2x, 1 in 400 for 4x, and maybe 1 in 16000 for the 8x. Almost everybody are on some kind of NSF-type grant. Odds are way better in the WSP-approved fields.

(*) It also helps a lot to be in a field with industry applications. The weekly solid state physics colloquium at myUniversity had catered food complete with waitresses sponsored by some local big company. The nuclear astrophysics physics colloquium had store bought tin cookies and coffee from a machine that one of the secretaries wheeled down from another floor. The solid state guys also got paid more for what was essentially the easiest branch of physics. We later learned that the solid state group had finagled a deal with the department so their grad students didn't have to waste any of their time teaching either

[Riggerjack]

The complaints about income doubling make an interesting read after the 9.9% thread. It seems like the college to white collar wage slave path, is more limiting than I thought.

If you want to double your income, and your boss won't just do that for you, shockingly, you will need a different path. This doesn't seem very controversial. But at this point, you are only working half time. You have another 40 hours a week to dedicate, just to be in the running of this race. Get another job, income doubled, easy. Or start a side business, harder, but better upside.

I can say from watching others, that it doesn't take great intelligence, but it does take work. I know a pumber who works an average of 15 hours a week keeping 6 other plumbers in work. It started by looking for side work,then getting guys on the crew to help him with side work. Now all he does is submit bids for work, and order materials and deal with scheduling. He went from working 40 hours a week to 60-65 to 15. He would hire someone to fill his shoes, except that then he doesn't know what to do, and his ex is taking a.big chunk. Decent guy, but not super bright or hardworking, he just had his father's template to work from, and copied what he did.

I know many folks here studied hard and worked hard for what they have. That path led them to the successes that led them to search out ERE. But that path won't lead to 1% income. That doesn't mean 1% income is impossible, it means you need to do something different.

I make only 6x,000 a year in wages. In a union job in a regulated industry. My raises are mapped out years in advance, and have nothing to do with my performance. Working longer is not the route to increased income. So I'm a landlord. And when I retire, I'll open a hobby business, because I am downscaling currently. So WSP is useless to me, and the douchbag quotient is way too high for me. But if I were in my early 20's again, this is a valuable template, and I wish I had considered some of this when I was younger.

If you are reading WSP and thinking it doesn't apply to you, that is your choice. It doesn't apply to me, either. But that is also my choice. But if you are.thinking that it doesn't apply to you because of X,Y, or Z, please recognize that X, Y and Z are also your choices, and you can make different choices with different results.


And, because there were links, and I am working, I followed the dating link to see how bad it would be. No comment about DB dating. If that's your thing, or not, you already have an opinion. But buried in the text was a formula for ideal body measurements to was entertaining. It bases everything on the measurement of the wrist. Now, I'm a fat office worker, who used to work for a living pulling cables. So I have large wrists. 8.75 inches. Using their formula, my ideal body should measure:
Chest 57.5 inches I have a big chest, but if it were this big, I wouldn't have to bend my elbows to do push-ups!
Waist 40 inches high ( hmmm... I guess I'm not fat)
Hips 48.75 inches (really? So I'm supposed to have a very wide hourglass shape?)
Thigh 30 inches
Bicep 21.25 (so back when I was 65 lbs heavier, I was closer to ideal. How depressing!)
Neck 21 huh. I have a hard enough time finding shirts that fit and are comfortable. How much worse would that be with 3 more inches in the neck?
Calves 20 inches. Wierd. I have 17 inch calves, and they seem oversized.
Forearms 16. Strange, the only part of my body that matches my wrists is my forearms.

I don't bring this up to brag about having proportional forearms, but to talk about using one metric to tell a story. When you only have one metric, very often, things don't fit in the real world. As you add metrics, the outliers are fewer and each example is a better fit or more of an outlier. Just as the idealized metric above based on wrists doesn't fit my real world body, a simple metric like income is not going to give good indicator of what is possible. Your situation is your own and any limits are either yours or chosen by you.

WSP seems to be dedicated to choosing fewer limits, and maximizing leverage, to live the consumerist dream. It's not for me, but I'm glad the template is out there, and I'm sending it to my nephew, who may be able to use it. (Though not likely to produce a 1% income, in his case, it may help.)

[jacob]

The complaints about income doubling make an interesting read after the 9.9% thread. It seems like the college to white collar wage slave path, is more limiting than I thought.

The "college" path does indeed not develop much of what Taleb would probably refer to as "Fat Tony" skills (street smarts or here, career smarts). As a result, middle-class white collar slaves lock themselves in more or less based on whatever fancy/interest they enjoyed when they were made to pick their major around age 18-19 or so.

Furthermore, it also depends on which college you go to, cf. community college and Ivy. When I was initially applying for finance jobs (and failing) back in 2008 (after being liberated from my international slave trade visa restrictions), finance listings stipulated that one had to have graduated from a "top tier" university. When I actually got a finance job in 2012, I realized that "top tier" != (not equal) Ivy League but more or less just meant "a good school" which again just meant that one was smart enough to understand and write a subroutine in whatever random programming language. Not that high of a standard, really.

However, when I later served as the final interviewer screener for young hopefuls, it was still clear to me that "brand name" meant a lot to the partners who had gotten used to relying on them as source-points. My function in the hiring process was to screen out the dumb ones AFTER they had already passed through the screens of brand name university and the initial interview behavior behoving of the aspirational or already upper middle class. Also, there's a lot of recruiting either directly at brand name universities .. or indirectly via internships that aren't offered to the riff-raff colleges.

As such, "incest" is quite pervasive. There's some rumor that all the bond-traders in the US come out of Duke (IIRC!!!!) because they all hire each others friends and younger siblings.

However, obviously "grit and agency" does work on occasion. It worked for me. However, I had to work a lot harder that your random summer intern from a "top tier" university.

In addition (and this is more relevant to the 9.9% thread) ... while a heavy assist from one's alma mater can substitute for Fat Tony skills, so can a one's upper class family substitute or more accurately teach such skills. My alma mater is not impressive (in global rankings) and all I learned from my family was to work hard and avoid bullshit[ting]. Thanks parents while that's good for crushing it in the blue collar scene, it certainly didn't help me in terms of gamesmanship when it came to white collar careers where politics matter. (For example, I actively avoided pursuing awards even when I was suggested to go for them because I thought it was showing off ... #lawofjante ... Pretty stupid (cipolla helpless) but also deeply ingrained).

As a result, I developed ERE as an outlet for the boredom of white collar slavery. However, had I been born into a mid/upper-class family (in which I wasn't the first to graduate something beyond HS) in the US who knew how and what game to play, I consider it extremely likely that I would have turned into a successful midly-six-fig earner, prob. working in the defense industry. In that case, that might have been sufficiently interesting in terms of advancement/oppotunity and if so then there would have been no such thing as ERE.

[Stahlmann]

Begging post no 5427

you are reading WSP and thinking it doesn't apply to you, that is your choice. It doesn't apply to me, either. But that is also my choice. But if you are.thinking that it doesn't apply to you because of X,Y, or Z, please recognize that X, Y and Z are also your choices, and you can make different choices with different results.

Senpai Riggerjack teach poor stahlmann chan to make big moniew.

Now without irony why do your think wsp advice applies more than to 5% of people?

I enjoy your coaching posts, so feel free to answer ;p

[BRUTE]

WSP’s Personal Capital link is an affiliate link

btw, this is a leading indicator of BS for brute. a human who views $200k salaries as chump change puts up affiliate links? really?

[BRUTE]

Senpai Riggerjack teach poor stahlmann chan to make big moniew.

Now without irony why do your think wsp advice applies more than to 5% of people?

brute realizes he is not Riggerjack (yet), but here are the answers Stahlmann seems to be looking for:
1)no, WSP applies to way less than 5% of humans, especially globally. maybe 5% in the US.
2)Stahlmann will never have the easy path to riches that an upper middle-class human child from Long Island has.
3)there is no way to jump from Stahlmann's current place in life to any place on the WSP "career ladder".
4)yes, life is unfair.
5)the best possible thing that brute can imagine for Stahlmann is finishing his degree (or has he finished it?) and moving to a richer country. US/Canada/Australia might have more upside, but EU countries (Germany probably?) will be easier for Stahlmann to get into due to visa issues.

in brute's opinion it is much easier to be an average-sized fish in a bigger pond than to be a big fish in a small pond. Stahlmann should try to pond-hop.

[7Wannabe5]

@trailblazer:

Thanks for your vote of confidence, but I only need to earn about $80,000 over the next two years in order to s to make plan by 2022. So, WSP practice would only make sense if micro- version would allow me to better earn $80,000 in just one year.

@ Riggerjack:

I also do not wish to brag, but my chest to wrist ratio already exceeds that suggested as ideal.

[Riggerjack]

@S,
Honestly, what little I know about Poland, stopped being current before I was born. I know a bit of your history, but almost nothing of current conditions, other than there seems to be many Poles in the UK for work, and that doesn't seem promising. So BRUTE nailed it in point 5. It's just easier to get money when there's more around.

However, that doesn't help you today. Today, you should read through the blog, think about it a bit, and use what you can.

It was a bit of the personal coaching type of advice that impressed me. Not that it's accurate, or wise, but it's a template worth knowing about. I found it interesting to see a Douchebag from the inside, and I was a bit surprised that there were parts I didn't hate. And it's that part that made me send it to my nephew. I don't think he's going to wall street. I do think an excited, hardcore life plan site could help. ERE and MMM didn't make a dent in that kid.

At this point, I am just recommending anything with long term life planning. Not that I want him to follow a template I have found, but to expand his ideas of what he can be, with step by step guides.

So Stahmann, I recommend them to you in the same spirit. To expand your ideas of what can be, and how it's done. Not to recommend the template, but to have it as a reference.

[Fish]

I read the "Efficiency" book. It was a decent read (+1 sigma) and what I found most remarkable was the writing style, which was extremely to the point. They clearly don't like having their time wasted and they treat the reader with the same respect. Also, they are not trying to prove any points, they simply give their reasoning and if you're not convinced that's ok with them. As @trailblazer noted, a fair amount of the book was recycled from the blog. I didn't mind because it means that they gave away many of their best ideas for free, which is respectable. The same goes for The Simple Path to Wealth by JL Collins.

Unlike others here, I don’t think WSP is innately incompatible with ERE or directly advocating for high consumption. WSP's fundamental tenet is "time is the most precious resource." Frugality has a similar view, but also tries to minimize spending since money=time. The difference is that WSP views money as a near-unlimited resource while "regular person" FIRE has more of a scarcity mindset due to limited earning prospects since earned income is near the median and business income is minimal if it exists. Therefore WSP is willing to spend money to make money:

Step 4 - Buy Time: The return must be in excess of the money spent. If you’re spending $100 a week to have your laundry done, yet spend 10 hours a week watching Netflix… you’re wasting money. If you’re spending $100 a week, but this frees up time to earn $200… Make the move.

Since this is a cost of revenue, for accounting purposes the laundry cost in this example should be subtracted from income, instead of being added to living expenses. It is a business expense because the time saved is used to work. Therefore, it is an increase to net income and should not adversely affect the savings rate.

The whole point of starting a business is to increase the value of your free time. If you don't have a biz or refuse to work a second job, then using the time to be frugal is your best option (substituting time for money). However, with a biz, some things that you could have done yourself such as cleaning your own house or doing your own laundry no longer make financial sense when you can earn more $$ than it costs to outsource those tasks. It allows for an increase in net income while maintaining quality of life. Furthermore, a business grows, providing very high ROI opportunities for your time and money. The stock market is a parking lot for excess money after you've made it with your business. Almost no one is going to get super-wealthy (call this 5M+) with wage income and stocks returning 7%. Hence a biz. For those with lower ambitions (2-3M), it is acknowledged that high income alone will work but they still recommend a small biz that covers the cost of living, just to get out of scarcity mindset when it comes to money.

Overall, I think the personal finance advice on the blog is solid; they advocate living like a student and ramping up the spend slowly as income increases. Their rule of thumb is that every year worked should add at least 1 year of expenses to NW. This rule clamps down on lifestyle inflation when income goes up, and is somewhat forgiving if income goes down. For example, suppose income is 50k in year 1 and 100k in year 2. By this rule, Y1 spending should be <= 25k. Taking the max (25k) then Y1 savings stands at 25k. In Y2, spending can be at most 41.6k (also note how savings rate is >50%). If income holds constant at 100k then spending will asymptotically approach 50k as time goes on. Conversely, if this is flipped and 100k is earned in Y1 and 50k thereafter, expenses would be 50k in Y1, 33.3k in Y2, and eventually converging to 25k. I like it because it provides an alternative to "save as much as possible" presuming that FI at age 40+ is acceptable. Note that WSP draws the FI line at 21x, but they are also more conservative by recommending the creation of a biz that pays living expenses (so a score >=1.63 on @jacob's FIRE income index), and also excluding retirement accounts from NW or at least discounting them by 40% to account for deferred tax liability.

Anyway, WSP has given me some new ideas that I'm trying to reconcile with ERE and it's interesting to think about.

[TopHatFox]

I feel like the site completely skips over the part where if you follow their 200k income path, you’re now locked in an office with 30 men with an up or out attitude, working 80 hour weeks, and wearing fancy suits in stressful places to live like LA, Silicon Valley, or NYC. For 10-20 years.

Getting a cushy government job surrounded by women is much nicer. The job stops when it’s done, and you can come in to work with some chinos and soft wash shirts. Yeah you’re earning 50K, but you can get to 70K and save 60K per year using 1.5 Jacobs. That’s still north of 500K in 5-10 years, but haha that’s chump change.

Sounds like they advocate for the 3 M as the marker for wealth, which seems offly high. It reminds me of my startup bro-dude friend who made 450K in an IPO sale and used all of it to strive for the millions. With 600K one can slow travel just about anywhere for however long.

I suppose what I’m taking out of the article is to be glad that I’m not working in one of these insanely competitive industries with people with competitive attitudes.

That said, getting a part- time job doesn’t sound like a bad idea with the full time job once you’re skilled at the full time job. The whole « residual income business» thing is still a mystery to me, but it’s also unnecessary unless of you’d like to strive for the 3M mark in less than 10 years.