3 yrs to FI: ertyu's journal

Where are you and where are you going?
ertyu
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Re: 3 yrs to FI: ertyu's journal

Post by ertyu »

Some reading I enjoyed: https://www.theatlantic.com/family/arch ... y-workweek
To Alec Burks, a 30-year-old project manager at a construction company in Seattle, Sunday evenings feel like “the end of freedom,” a dreadful period when time feels like it’s quickly disappearing, and, all of a sudden, “in 12 hours, I’m going to be back at my desk.” It’s not that Burks doesn’t like his job—he does. But one thing that contributes to the feeling, he told me, is that “you almost have to shrink who you are a little bit sometimes to fit into that mold of your job description.” The weekend, by contrast, doesn’t require any such shrinking.

Hail_Diogenes
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Re: 3 yrs to FI: ertyu's journal

Post by Hail_Diogenes »

ertyu wrote:
Sat Dec 28, 2019 8:42 am
Fuck every single boss that ever made me write targets, truly.
Amen, brother.

ertyu
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Re: 3 yrs to FI: ertyu's journal

Post by ertyu »

I guess I should write an update of sorts.

I have left my job and returned to my home country to be with my old parents. I am also at risk, being a 40 y/o fat shmuck, but at least I'm just fat and don't have any other complicating conditions as they do. Jacob and Bostonimproper advised that I go back to work and that I fly if something happens to my parents, but with quarantines, travel restrictions and canceled flights, I was not sure I could do so. Therefore, I did not return to work even though I had bought a ticket.

As of now, I am not sure when I will work again, and what I will do. I am now at my parents' place, and my parents are generously footing the grocery and heating bill. I raised the question of chipping in but they claim they are fine. Tbh, I think it's pride. I will of course contribute if needed. They are aware that I have an emergency fun in the local currency which I can live on for 6-9 months for this exact eventuality.

My stash (aside from emergency fund) is now at 25x local yearly spend/25JAFI. Being an underinvested chicken, I was (and still am) all in cash. Undecided on whether I should be in euro or usd (now half - half). Juliette Declerq says long euro. Brent Johnson still believes in the milkshake. Remains to be seen.

Right now I appear to be in a holding pattern. My country is waiting for the virus to sweep (and sweep it shall, our health care system is ok-ish but nowhere near able to handle this). I have no plans. My father is old, a heart attack survivor (4 yrs ago - stent) and must take immunosuppressants for a pretty nasty autoimmune condition (had a crisis episode and lost 40lbs in a month 2 yrs ago). He is very likely to develop severe complications, and very likely to be triaged into the "oh well, good luck I guess" group. It is quite possible he has 2-3 months left to live. I will spend that time at home with him and mother (also old but fat - but otherwise healthy. That + female makes me think she has a higher chance of not needing to be hospitalized).

ertyu
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Re: 3 yrs to FI: ertyu's journal

Post by ertyu »

My father refuses to take the virus seriously and take precautions. I feel like we are unprepared as a family and it is scaring me. He starts shouting whenever me and mother begin to discuss how we will handle it, which I assume is his way of keeping his hands on his ears and going LA LA LA, being the person at highest risk in our family. Just sharing.

AnalyticalEngine
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Re: 3 yrs to FI: ertyu's journal

Post by AnalyticalEngine »

I hope you and your family stay safe. These are unusal times we're in, and some people respond to it with denial. It can be very frustrating.

ertyu
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Re: 3 yrs to FI: ertyu's journal

Post by ertyu »

It is interesting to see how my psychology has reacted to being out of a job.

First of all, even though I have 20 years' worth of savings (if I manage to preserve principal) which assumes a comfortable-ish lifestyle (no deprivation, coffee at coffeeshops, etc), it has been very frightening to me not to receive a salary to top this up. Basically, without a regular salary, I have felt like wile e coyote pedaling in thin air - the bottom is about to fall out at any time, so pedal pedal pedal. There is nowhere for these savings to go but down, and an adverse macroeconomic development can destroy them completely, rendering all personal sacrifices I've made in life so far useless. I would need to start again, burnt out of not.

Second of all, housing - both to own and to rent - is available at 25% monthly expenses / 25% NW, not less. Discouraging. Alternative dwellings I have considered have so far been impractical.

Third, the fear around not having an income has led me to day trade in somewhat desperation - which is how my brain squares its need to stay in cash (stock market perceived to be unsafe - yes I know printer go brrr, I'm aware of all the arguments, but.) and the realization that I have to be growing this money somehow or I am losing money by the day. I am not into indexing this late in the game (would have been had we actually fallen to mean historical valuations at 1700-ish on the SPX), individual stocks - very much the same, I am capable of running a dcf model but can't help but think that whatever I put into that dcf isn't any less of a wild guess, just a wild guess made using numbers. As of now staying on the sidelines, feeling quite paralyzed after losing a month's wages. Investing on the basis of "what trouser leg it's in when I wake up" (local folk saying) hasn't resulted in a successful strategy.

I have tried looking for jobs, even jobs with low pay and hopefully low stress, but closed borders + corona. Little one can do.

Unsure what my plan is here. Tempted to just say "fuck it" and put a year's pause on everything other than reading, scratching my balls, and trying to get in shape on the off-chance it fixes the anxiety and the depression. Re-evaluate May '21.

Gilberto de Piento
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Re: 3 yrs to FI: ertyu's journal

Post by Gilberto de Piento »

ertyu wrote:
Mon Apr 13, 2020 7:49 am
I have tried looking for jobs, even jobs with low pay and hopefully low stress, but closed borders + corona. Little one can do.

Unsure what my plan is here. Tempted to just say "fuck it" and put a year's pause on everything other than reading, scratching my balls, and trying to get in shape on the off-chance it fixes the anxiety and the depression. Re-evaluate May '21.
It sounds like you may be catastrophizing here. You don't have a job but it sounds like you have enough to pay your bills. Things are in the toilet in general right now but that doesn't mean they will be for an entire year or that they are guaranteed to be bad for you.

You seem like a very smart person. I'm not sure what your skills are but maybe you could find a remote job. Or if you can't maybe this is a good time to work on the psych issues (though beware that it may not work if the job problems or coronavirus problems are too much to get past).

It may not work for everyone but getting exercise is often helpful for depression but it can be hard to get going. It doesn't have to be a heroic effort, just do something and do it consistently.

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Re: 3 yrs to FI: ertyu's journal

Post by jacob »

ertyu wrote:
Mon Apr 13, 2020 7:49 am
Third, the fear around not having an income has led me to day trade in somewhat desperation - which is how my brain squares its need to stay in cash (stock market perceived to be unsafe - yes I know printer go brrr, I'm aware of all the arguments, but.) and the realization that I have to be growing this money somehow or I am losing money by the day.
I've found material piece of mind in a substantial STIP position [instead of cash or CDs]. Starting out in day trading is of course the worst possible response to fear at practically the worst possible time, but you already know that ...

ertyu
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Re: 3 yrs to FI: ertyu's journal

Post by ertyu »

@jacob broker won't allow me to trade it, i assume due to residency/citizenship

Edit: this might be an option - https://www.trackinsight.com/en/fund/IE ... _perf,flow

ITPE euro-hedged, ITPS in $.
Last edited by ertyu on Mon Apr 13, 2020 11:25 am, edited 2 times in total.

slowtraveler
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Re: 3 yrs to FI: ertyu's journal

Post by slowtraveler »

@Jacob
Do you mean STOP or STRIP position? I couldn't find the meaning of a STIP position anywhere online.

@ertyu
I found Wellesley to be comforting when the market was high and I was unsure of what was happening. It may not be available to you though.

Permanent portfolio (equal division between gold, long treasuries, short treasuries or cash, and broad stock market) or golden butterfly ( same except add small value so 20% in each) may be of interest, they seem to have held up well in this environment so far. If you do them, buy everything directly rather than through an etf that claims to mimic the permanent portfolio so you can have lower expenses, better tax efficiency, and asset performance more in line with the expected performance as the funds I've seen don't seem to track very well.

My friend is also day trading at this time due to fear. I've tried warning him but he seems confident in trading with under 1% of his networth until he gets good.

I second the idea of remote work. I honestly thought you were a native English speaker. I'm sure there's tons of families now looking for virtual teaching across the world. Whatever 2nd languages you know, you can apply to that market so you can better help your student learn.

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Re: 3 yrs to FI: ertyu's journal

Post by jacob »


Quadalupe
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Re: 3 yrs to FI: ertyu's journal

Post by Quadalupe »

@ertyu, maybe practice with some mock portfolios? E.g. https://www.investopedia.com/simulator/. It of course isn't the same as trading with real $$$, but that can also be a blessing when you're still learning or tilted.

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Re: 3 yrs to FI: ertyu's journal

Post by jacob »

Quadalupe wrote:
Mon Apr 13, 2020 11:05 am
maybe practice with some mock portfolios?
Professionally, I disagree. Dealing with emotions (one's own and other traders) is half of this game and paper trading won't teach that. It might even teach the wrong lessons. The best/standard way is to allocate a fixed amount that is sufficiently large to cause psychic damage if, nay, when lost. If it's too small to matter, people take larger risks than they otherwise would have and that "lesson" will be damaging when scaling up to larger position sizes. If it's too large, that's just overpaying for tuition money.

The trick is NOT to add in extra money once one starts losing. That's how fortunes are lost. If all the money is lost, spend a year in timeout. There needs to be some system in place to prevent stupid. This system must be strong enough to resist emotional appeals which will appear at some point.

Every trader needs to read this: https://www.amazon.com/What-Learned-Los ... 00NC63DBW/ ...

ertyu
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Re: 3 yrs to FI: ertyu's journal

Post by ertyu »

book secured, many thanks.

one immediate lesson i can think of is, thus far i have been looking at trades on an individual basis. i need to look at them as a whole so i can acknowledge that losing trades aren't the end of the world and aren't annihilation, they are something that happens within a larger context.

I think something that gets to me psychologically is how marginal my stash is. If I were trading with 3x the amount of money in the bank, my psychological state would be really different. And this isn't a matter of sizing the trades, which would probably be the main advice here - size smaller, cap losses lower, etc. It's more a matter of being on the brink between enough and not enough when it comes to stash size. At 3%, I'm at a little less than 1JAFI/yr, which would require extreme leanness of spending - not there yet skill-wise, and definitely not in an urban environment. I could probably survive, but I will not feel like I am living a full and fulfilled life. Also, unexpected medical emergencies and the like are not counted here. At 4%, I'm at 1JAFI/yr, which is tight but doable - but I know better to trust a 4% WR off of these valuations. I still feel like I don't have enough savings and that my situation is precarious. If I had at least double the money, it seems to me I would know that any one loss is not necessarily catastrophical.

But yes, got the book, off to read.

Frita
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Re: 3 yrs to FI: ertyu's journal

Post by Frita »

It sounds like you have realized you aren’t a lean ERE guy. Keep going, there is a point where you have the skills to live on a lot less and are amazed by how your money is increasing.

ertyu
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Re: 3 yrs to FI: ertyu's journal

Post by ertyu »

Not necessarily that I'm not a lean ERE guy - I can aim to get there but at the same way to know that I don't have the skills *yet*. Also, even though my values align with lean ERE (I am on this forum after all), I grew up in poverty and societal and economic turmoil, and the feeling of terror and precariousness is real. More likely, I'll end up like iDave - spending 1JAFI but only able to relax into it after I have accumulated a lot more than that. That said, even if a large stash is my preference, circumstances might not allow such accumulation to happen. In fact, that's what seems like will happen. This would mean that like it or not, I would *have* to be a lean ERE guy and learn to swim (both psychologically and skill-wise) as I go along.

CS
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Re: 3 yrs to FI: ertyu's journal

Post by CS »

I second the permanent portfolio. I've been in it since 2013 - even got my mom to do part of her portfolio in it. It is really stable. Most years I look at it a few times a year and then concentrate on other things. Seriously. It has done well in this downturn. I'm about where I was at the beginning of the year. It matches my interests (I have no interest in being a money guru) and psychology (I am reactive - I don't need my portfolio provoking me. Any thing that stresses me out is too high a cost.)

Instead of thinking of this time as a huge problem, think of it as an opportunity. Is there a language you would like to learn? A skill? It's like being a prisoner in some ways - some prisoners use their time well by working out (getting into shape) and getting degrees (getting their minds into shape).

What non-money goals do you have for your life? How can you do them now? How can you come out of this time stronger in some facet than you ever thought possible? Wanting to be a money guru is one thing if that is a desire of yours, but if it is only out of fear, that is another entirely.

Any life skill you work on will help your confidence and help you sell yourself in life. Hard work is attractive in employees, business partners and romantic partners.

Personally, I'm going to take some online singing lessons (a life long embarrassment has been not being comfortable singing), as well as working on contemporary dance routines. All this stuff is online now! Plus continuing the writing and working out.

You have 20x times living expenses. That is not that small a stash. The whole world is on hold right now - it's not like you're the only one in a holding pattern. What you walk out of it with is what will distinguish you from others. Money is not the only metric.

Edit: To make things a little more bearable in your parent's home, perhaps use the tactics of the camel and the tent. :)

slowtraveler
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Re: 3 yrs to FI: ertyu's journal

Post by slowtraveler »

Sage advice from CS.

What is it that you really want from money and finances? If it's your love and passion, go for it but it's really not a need for you to become a genius with money, there's many ways to grow your purchasing power over time without the heart dropping volatility and resultant anxiety, albeit at a slower, steadier rate. It's an amazing deal for many people.

If you're all cash, there's a high chance you'll lose out to inflation over time and you won't get any wisdom or practice investing. If you are interested in the permanent portfolio, our dear tyler9000 has done a thorough analysis here*, and it can all be done with low cost ETFs like TLT, IVV, IAU, and a savings account.

I'm not sure where you live but you could live an convinient lifestyle for 6000/yr in some countries like Thailand or Vietnam: 150usd/month for housing, 3 meals a day for 150/month, 100/month for transportation, and 100/month for visas and flights. I enjoyed Chiang Mai, Surathani, Hanoi, and Da Nang as affordable cities.

* https://portfoliocharts.com/portfolio/p ... portfolio/

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Re: 3 yrs to FI: ertyu's journal

Post by Bankai »

Here's how I see your situation from the perspective of opportunities rather than fears:

Your savings are at 20x your (presumably comfortable judging from your coffee comment) expenses - how many people in your country have a stash of this size? Max 5%, probably more like 1-2%? How many of them are also only 40 and have experience of working in a high paid job abroad? You're way ahead of the game.

You are clearly very intelligent and able to get a well-paid job in another country - you've done it (at least) once so you can do it again - it gets easier each time as your experience and confidence grow and your CV gets better. I think it will be easy for you to restart an income if you decide to do so.

You are terrified that inflation is eroding your stash every moment - I don't think this is a useful way of looking at things - similarly to being terrified every day that you have one less day to live. If you're in the EU and intend to live there, you also presumably have your money in euros - when was the last time there was any meaningful inflation in the eurozone? Never - countries would love to see some to inflate the debt away but it's not going to happen with shrinking and aging population. And even if it goes up to 2% - so what? That's 0.4 annual expenses - you can work it back in a month and a bit once you work again (assuming 75% SR). In the meantime, you have options open, for example, to buy a property when the prices go down (and save much more than what inflation can do in a year).

Housing - if you can buy house/flat for 25% of your NW, I'd say that's a very good deal. If you look through the journals on this forum, most people with low expenses (1-2 JAFI) have housing as their main expense, often comprising of 50% or more of all expenses. Also, buying a property protects from inflation as well as 'hides' a part of your NW from your impulses (ie. from gambling it away in the market). And with housing covered, your expenses will forever be lower so even if you lose everything else (not gonna happen, just hypothesizing) you at the very least will have a home and need much less to cover the rest. It will also give you a lot of peace of mind.

Trading - it's best if you don't. Really. From what you wrote I assume you've never invested/traded and your money just sits in cash. If that's the case, now is the worst time to start considering market conditions, your mental state, and your (perceived) financial situation. One of the most important rules is to only trade with money you can afford to lose - you are in a scarcity mindset and guided by fear (you believe you don't have enough) so you're not in a position to trade with a clear head and no fear. If you insist on trading, limit it to a small %age of your NW (really small, like 5% or 1 JAFI tops). You also need a trading plan so you know what you're doing (maybe you have one but you never mentioned it). However, personally I don't think you (at least currently) are in an optimal place to make money in trading and would be better off researching some time-tested portfolios and just going with one of them (see previous comments on PP or GB).

I think you already know the best course of action:
say "fuck it" and put a year's pause on everything other than reading, scratching my balls, and trying to get in shape on the off-chance it fixes the anxiety and the depression. Re-evaluate May '21
Objectively, you are in a very strong situation financially and there's no pressing need to do anything. I know you might not feel this way, but consider this: nowadays you have three groups of people - those who work because they have to (because they have no money) but wish they wouldn't (afraid of the virus), those who wish they could (as they have no money) but can't (were fired), and a very small third group - people with a stash who don't have to do anything they don't like (at least for a good few years). You're in this privileged club - why not take advantage of it and relax and enjoy a bit after all these years of hard work? More importantly, money is one of the least interesting things in life - try re-focus on other areas. Just chill, re-thing your priorities in life, take care of your health (way more important than money), take care of your relationships and maybe find some new ones, read some fiction, listen to your favorite music, go for long walks, learn to cook or do anything else you fancy. And stop obsessing about money.

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Re: 3 yrs to FI: ertyu's journal

Post by wolf »

I'd say in regards to investing read the whole Safe Withdrawal Rate Series by Early Retirement Now.

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