oldbeyond's journal

Where are you and where are you going?
oldbeyond
Posts: 247
Joined: Thu Nov 29, 2012 10:43 pm

Re: oldbeyond's journal

Post by oldbeyond »

I tend to write headings for different parts of my life. I try to make the whole > (sum/product) of the different spheres and make sure my goals are aligned, but I need some structure that chops the chaos of life into manageable pieces.

There are different ways of looking at the whole. It can be conceived as a simple sum. In that case, moving from 9 to 10 in one category (the numbers/scale obviously being arbitrary) is the same as moving from 1 to 2 in another. Or, it's some kind of product where the impact is much greater if you move from bad to ok than from very good to great. One could certainly create many different models that were all providing some truth, and debate their respective merits (and of course how you define and weigh the different spheres is also arbitrary). But it seems to me the product route is the way to go.

Looking at myself, what I usually call the MENTAL sphere is obviously dragging the whole down (half empty), and that's where the potential for great improvement lies (half full). The other spheres, as I've defined them, are OK to good at this point, even if none of them really achieve greatness. But the MENTAL part of my life is, if not terrible, bad. There are a few separate issues I'm dealing with (anxiety, self-esteem, meaning), but the most acute problem (that also feeds into the others) is my poor sleep. There have been periods of relative stability, but overall I've struggled with sleep since my teens. Right now, the last six months have been bad, and the last few weeks terrible, with sleepless nights and accumulating fatigue that is starting to alter my personality and restrict my life (energy is too low for a lot of activities by this point). So short term, I need to get out of this bout of insomnia, and medium term I need to to everything I can to improve sleep quality, making sure that my lows are much higher. With good sleep, I should mellow a bit and be able to attack them from a place of (relative) strength.

oldbeyond
Posts: 247
Joined: Thu Nov 29, 2012 10:43 pm

Re: oldbeyond's journal

Post by oldbeyond »

I'm over my acute sleeping problems, but there are still a lot of ground to cover in order to solve, or at least more robustly manage them. Thinking about it more clearly now without the insomnia clouding my brain, and without the frustration and panic of ”no sleep”, I feel it’s quite obvious that it is my anxious habit of continually turning over thoughts in my head, usually in a desperate search for certainty and permance, that keeps me up at night. When I’m not actively engaged in thought, I’m in the chaotic emotional aftermath of it. The desire to avoid pain really is the pain. And this is felt in other parts of my life, too. Basically, I’m a person craving total stability who spends a large chunk of his day mulling over potentially very serious problems (ecological, economical, political, social, cultural). Clearly, something has to give. Logically, there are not too many options:

1. Alter reality - basically solve every issue that would menace humanity. Obviously not an option, really.
2. Alter my perception of reality - basically active ignorance. This seems like a poor and brittle strategy and is perhaps most unworkable for someone with my temperament.
3. Alter my craving for stability. Which is basically what our great ethical and spiritual schools try to teach us. I guess this really is the only option.

This feels like a rather daunting and nebulous task, obviously. I’ve read quite a bit on the subject before - Seneca, quite a bit about daoism/zen, Nietzsche, Peterson etc. I’ve done some CBT before and was quite successful in the defined realm where I applied it. But I’ve never really put in the work to alter my more basic anxieties.

At it’s root, I think it comes down to a lack of humility. I have this sense that I should not have to endure inconvenience and discomfort and that the world should cater to all my needs, without me really having to do or even say anything to aid the process. This leads to me being easily annoyed by any hiccup, both in people or things. Continued failure leads to an inversion of the basic feeling, where I am now uniquely wretched and useless instead. This creates a lot of unnecessary suffering for me and others, and maintains a rut that should never have been.

So what do I do? Journaling helped me a lot with my sleep. The act of having to look at my routine and choices and reflect on them allowed my to cut through a lot of the emotional cobwebs. This will be the first tool I employ - a short written reflection on my day, my emotions, thoughts, actions and passivity. I will keep it simple and concrete as I have a tendency to loose myself in long, ornate musings. Hopefully this will be a first good step.

oldbeyond
Posts: 247
Joined: Thu Nov 29, 2012 10:43 pm

Re: oldbeyond's journal

Post by oldbeyond »

I've kept this journal for close to seven years by now, a testament to my failure at extreme FIRE and to the enduring qualities of this forum. In light of this, I thought a recap of the last few years might be in order to observe my situation in a clearer light, assess what, if anything, I’ve done right and get a clearer sense of the future.

Financials are perhaps simultaneously the most boring aspect of my life and the most telling. When I started my journal our household had a net worth of 2x current expenses. Currently it’s around 6x, which isn’t very impressive. For the first ~3 years we were still in school and taking out student loans, so averaged over our working years our net worth has increased by 1x current expenses/year. We’ve had a fair savings rate, but obviously not exceptional. I’ve tried a lot of different investment strategies and learned a lot, without any real major setbacks (not that hard in the current market regime, though). Due us saving up for a down payment, I’ve kept risk down, so we haven’t participated in all the massive gains, but given our parameters I’m quite happy with our returns and my improved investing skills.

Currently we have 1x expenses in cash, almost 2x in securities and 5x expenses in home equity and 2x expenses in (almost 0% interest rate) student debt. I started out doing value investing, but I soon realized that my heart is not in analyzing individual companies. I switched to various attempts at a global permanent portfolio, but the more I thought about it, the more I lost faith in the PP outside of the US, and in bonds for us europeans. After some back and forth I’m currently at an allocation of 30% global index, 10% EM, 10% dividend fund, 10% Russia, 10% local market, 10% global REIT, 15% gold and 5% commodities. All are traded according their 100 DMA. This year my return was 17% with around 6% volatility (note that all figures are in my local currency). My benchmark is buy and hold 100% global index which had double the return this year, but also double the volatility. My portfolio sidestepped the 2018Q4 sell off, so in a longer perspective the relative return has been more favorable. It is being in the market, but having an escape plan ready which helps me sleep better given current valuations. I’m fortunate that I suffer no tax consequences from the trading (basically we have a type of account that you can opt for as a private citizen, where you pay a flat tax on all your holdings).

On the expenses side, we run a tight ship on the strategic front (no car, bicycle/short bus ride to work, bag lunch to work every day, reasonable housing), that allows for quite a bit of slack tactically (dinners out some times, some nice items, concerts and beer) while keeping a savings rate of around 50%, with a decent but not great household income. 2019 JAFI of 8647 scaled by sqrt(2) gives a household spend of roughly 2.5 jacobs (dependent on exchange rates). Looking at our expenses, it’s pretty obvious that the fat to be cut is in shopping (clothes, stuff for the house, books, gardening supplies), eating out (some take out, but also dinners on special occasions) and fun (concerts, beer out with friends, travel). For shopping, it’s often a lack of time paired with weak buying used skills/DIY skills that do us in. For the other categories, we mainly use money to make up for a deficiency in social skills/capital. We’re along for the ride, not steering the ship, and that means that we end up in a fancy restaurant instead of having a potluck with board games. There is some element of status anxiety here too, especially in the dining. Being more active in our social interactions is likely key here, as well as calling ourselves out on our aspirational bullshit. These problem categories have increased quite a bit since we started working so there’s been some lifestyle inflation. On the whole it hasn’t been too bad, and there’s been very little friction between us. Our current situation is sort of a good enough path of least resistance.

For me, reducing spending is important mostly in reducing my footprint, even if I’ll of course enjoy improving our financial situation. Our current lifestyle is reasonably efficient if we steer clear of air travel, mainly because we expend very little energy commuting, live in an apartment and eat mindfully. There is still the fact that our spending helps power the consumer economy, passing on the ammo as it were. I will champion DIY or buying used over the coming year, but in a positive, exploratory way. Hopefully increased skills will translate into lower spending organically. I will also cut back on big arena concerts, as they are quite expensive and my enjoyment of them isn’t that high.

I’ve established myself well in my career, had decent pay increases and learned a lot. I’ve found a niche that gives me some autonomy and is rewarding to me. I’ve followed the advice in ”So Good They Can’t Ignore You” and honed my skills in a particular area, which has paid off. Because it is a niche skill, and not a prestigious one, it hasn’t been to stressful and I’ve managed to also gain some decent experience in other areas of my profession. Due to relatively low wages, high marginal taxes and favorable safety nets and legislation, I’ll likely reduce my hours around 20% if we start a family. This will delay FIRE, but give me the life I’d like to lead. Hopefully it will also make it easier to maintain control over spending.

On the health front, I was quite inactive when I started my journal. I’ve slacked off a bit on cardio lately, but I’m likely in better shape than seven years ago. I’m definitely stronger than I have ever been, even if I’m still a novice in the gym. I had a few false starts, but now I’m following a good full body program, doing deadlifts, bench press et cetera. I’m currently doing 3x8x100 for deadlifts, so while not really strong I’m past the complete noob phase. Over the past year I’ve put on 5 kg while keeping body fat constant, hopefully I can keep my momentum this year and start hitting more meaningful numbers. In absolute terms this isn’t very impressive, but I’m very happy with my progress and in having changed my beliefs about myself - I feel like an active, healthy person now which is a big change.

The mental/spiritual front is perhaps where I’ve struggled the most. I am anxious by nature, which led me to withdraw and get stuck in my head in my youth. I do not withdraw as much anymore, and I’ve tackled a lot of stressful situations over the last few years. Having gotten through them is an achievement in itself in some ways, but I feel I’ve done too little on the strategic front to change my mental patterns. A lot of the other changes I’ve made (like better diet, health and being more organized) have helped, and I have of course worked on some of my hangups and bad behavior. I’ve focused more on this recently. I keep a journal of my good and bad actions during the day, which is helpful, but I haven’t really made a daily habit out of it yet. I’ve gotten nowhere with meditation, despite having talked and read about it for years, and I struggle with discussing these issues with others. In some sense I think a part of me likes being in the current rut and playing the victim when things inevitably get overwhelming. So what to do? I think making the journaling a daily habit, and also meditating on a daily basis would yield the biggest results. Obviously I need a plan to make this manifest. First, communicating this to my wife. Second, setting aside time for both activities. I will journal and meditate (for ten minutes) right before bed. If I’m unable to, due to social events or the like, I will do them in the morning after instead. And I will of course report on my progress here.

On the social front, things are going well. I’ve been quite good at keeping in touch with family and friends, and I am improving my social skills, if quite slowly. I can handle most situations fine, including high pressure ones, but I do come off as somewhat weird some times. Then again, I am weird, so I think I should set my expectations accordingly. Currently, I feel that being more active and organizing events or suggesting activities is something I could improve. Both to give back and to have more control over the activities, which also influences spending (se above). This would push me out of my comfort zone, but not too far.

When it comes to education, in a wide sense of the word, I feel I’ve done well. I’ve learned a lot about economics/finance, ecology, philosophy, history, literature, psychology, Chinese, cooking, fitness and nutrition. I’ve learned some about gardening, bike repair, home maintenance/remodeling, programming, baking and outdoorsy stuff. I could still spend more time actively learning and less time passively reading about others achievements, but I have become more active and now spend way less time on my phone. It’s an ongoing process, but I feel I am on the right track. Hopefully I can continue along it during the coming year (and decade).

Happy new year, should anyone have made it this far!

ertyu
Posts: 769
Joined: Sun Nov 13, 2016 2:31 am

Re: oldbeyond's journal

Post by ertyu »

oldbeyond wrote:
Sun Sep 29, 2019 8:00 am
The desire to avoid pain really is the pain.
word.

When I was reading your thoughts about the need to address your craving for stability, I thought of the book "Focusing" by Eugene Gendlin. It's old, so used copies of it are still around and they're cheap. You can also find an epub on the internet if you're not from a country where the book is accessible. He teaches a way to introspect that really helped me and that I think might really help you because you seem to be stuck how I get stuck: in the fighting-against. You say you shouldn't fight against uncertainty, but then end up atruggling against the struggle against uncertainty :D . Which is something I also do sometimes.
oldbeyond wrote:
Thu Jan 02, 2020 8:13 am

The mental/spiritual front is perhaps where I’ve struggled the most. I am anxious by nature, which led me to withdraw and get stuck in my head in my youth. I do not withdraw as much anymore, and I’ve tackled a lot of stressful situations over the last few years. Having gotten through them is an achievement in itself in some ways, but I feel I’ve done too little on the strategic front to change my mental patterns. A lot of the other changes I’ve made (like better diet, health and being more organized) have helped, and I have of course worked on some of my hangups and bad behavior. I’ve focused more on this recently. I keep a journal of my good and bad actions during the day, which is helpful, but I haven’t really made a daily habit out of it yet. I’ve gotten nowhere with meditation, despite having talked and read about it for years, and I struggle with discussing these issues with others. In some sense I think a part of me likes being in the current rut and playing the victim when things inevitably get overwhelming. So what to do? I think making the journaling a daily habit, and also meditating on a daily basis would yield the biggest results. Obviously I need a plan to make this manifest. First, communicating this to my wife. Second, setting aside time for both activities. I will journal and meditate (for ten minutes) right before bed. If I’m unable to, due to social events or the like, I will do them in the morning after instead. And I will of course report on my progress here.
The book will help with this also. It's essentially a way to introspect - you can combine it with journaling quite effectively imo.

oldbeyond
Posts: 247
Joined: Thu Nov 29, 2012 10:43 pm

Re: oldbeyond's journal

Post by oldbeyond »

Thanks for the recommendation @ertyu! I read the book and it actually really helped me, especially the simplicity of it and the lack of esoteric terms. There is a tendency in me to get dazzled be the terminology and how clever I am for "knowing" a few words of sanskrit or whatever. Not to disparage eastern wisdom, it's more the tendency in me of feeding my ego with "being sophisticated".

I've experienced the shifts he describes before, when I battled intensely with some issues and felt knots untie in my body when I finally got somewhere. Right after reading the book I focused consistently for a few minutes every day and it helped, things shifted. Not massive advances but steady progress. Life became busier and the habit died in it's infancy, but I usually need a few tries to make a change stick, so I will get back on the horse.

I've been slacking off with journaling too, but I have been a bit more consistent than with the focusing. I keep it very brief, but being forced to reflect on my behavior helps me adjust my actions before I spiral out of control too much. It gives me a better sense of the terrain, but I need deeper interactions with myself to be able to navigate it properly.

oldbeyond
Posts: 247
Joined: Thu Nov 29, 2012 10:43 pm

Re: oldbeyond's journal

Post by oldbeyond »

QUICK UPDATE ON EXPENSES

The first third of the year is now past us. I won't be spending too much time doing detailed expense breakdowns, but I think it's valuable to me to increase accountability somewhat, as I can be quite adept at rationalizing my failures.

Our budget is set at just above 2 JAFI scaled for household size (by sqrt(N), in our case sqrt(2)). This isn't a number that would represent the end of my struggle to improve, but it is a near-term goal to strive for. I'm using the automatic categorization from my bank, which isn't perfect, but works well enough for my purposes

Thus far this year, housing expenses and "household services" (basically insurance, phone bill, iCloud storage and union dues) are in line with the budget. "Eating out" and "entertainment" are quite a bit below budget. Quite a bit of this is corona, but we've also been more disciplined in avoiding take-out and having people over instead of going out (Jan and Feb).

Having the neutral and good categories accounted for, it's time to move on to the problematic ones.

Food: 15% above budget. We are better stocked now than we where before covid, we had a decent pantry even then but some weak spots have been improved upon since. The freezer has also been cleansed of some low-value stuff (all eaten, of course) and stocked with protein and vegetables. So some of this is due to increased stockpiling. A bit of it also results from me eating breakfast at home, drinking my own coffee throughout the week and missing out on a couple of free lunches at work every month. Ways to improve this would be cutting down on some expensive items (salmon, dairy, some more expensive condiments, chips, chocolate and ice cream), forgoing buying some stuff organic, eating more meals based on dry goods (the proverbial rice and beans).

Transportation: 67% above budget. Which looks bad. Included in this is a new (to me) bike for $300* and a front-loading of a lot of train trips in January (not due to prescience, but because it worked out that way). Due to the bike we will break the budget, but I could simply have treated it as a balance sheet event and added depreciation every month to my expenses instead. That seems overkill though. Basically we're following the plan, with me biking a lot (more with the new bike, 21 more gears helps a lot in hilly terrain), my wife getting a monthly buss pass and then a few train trips and car rentals throughout the year. We might be getting a car, which would increase our spending here (around 10% of expenses according to budget).

"Health and beauty": (healthcare, haircuts, pharmacy etc): 43% above budget. Mainly due to medical issues popping up (nothing serious). Ways to improve would mainly be to cut my own hair (or have my wife help me do it). The other stuff is likely some of the last spending I'd touch.

Shopping: this is "stuff in various forms". 15% above a pretty generous budget. This category represents around 13% of our spending according to the budget and is likely where there is the most fat to cut. Looking through the data, most of it has been spent on clothes (sweaters, shirts, t-shirts), exercise equipment and clothes (pull up-bar, medicine ball, dumbbell, shaker, pants, t-shirts), stuff for the home (new cushions for our outdoor sofa, art prints + a frame, water storage) and books (some paper back mystery novels, a reference book, some novels I've been eyeing for a time bought used) and gardening supplies (plants, compost, pots). There are also some misc stuff and gifts. Going through all this and writing it up, nothing stands out as being egregiously ill-advised; I don't really regret any of the purchases and they're all in use.

I think I need to pursue different strategies for different parts of this category. For clothes (I'm already pretty good at determining quality and buying on sales) - doing without, more buying used (perhaps bundles?), learning some altering skills. Exercise equipment - for some things, DIY might be possible. Stuff for the home - DIY, more minimalist aesthetic, buying more used. Books - using the library more, perhaps used tablet and project Gutenberg for older stuff, swapping books (there's a table at my gym where you're free to take and leave stuff, I should start using that), borrowing from friends and family, selling some old ones. Gardening - planting more from seed, composting/worm box, DIY pots/containers/watering systems. In general, selling more unused stuff and use the money for new purchases.

*the bike was something where I had previously underinvested, with the old, somewhat unreliable and not too incline-friendly one limiting my range and having me rely on public transportation a lot more, where I pay by the ride.

classical_Liberal
Posts: 1519
Joined: Sun Mar 20, 2016 6:05 am

Re: oldbeyond's journal

Post by classical_Liberal »

oldbeyond wrote:
Sun May 03, 2020 12:23 pm
the bike was something where I had previously underinvested, with the old, somewhat unreliable and not too incline-friendly one limiting my range and having me rely on public transportation a lot more, where I pay by the ride.
This is where I would ask yourself the question, Is what I'm tracking impacting my behavior? Obviously a new bike that causes you to ride more vs more expensive travel is a very worthwhile investment, but yet it broke the bank on your transportation budget. This is an interesting topic for me, ERE accounting.

This type of scenerio is why I have very mixed feelings about expense tracking. In my case tracking it does impact my behavior and I may have not purchased the bike. OTOH, it would have me looking for other solutions to fill the bike "hole", so maybe it's good. I don't know. What I decided, personally, is that anything over a certain price point (X% annual spend), that will have a direct impact on future cash flow, I'm going to depreciate if it's something that tends to lose value. The depreciation should match up with the reduced cashflow OR it needs to provide known benefits to other nonmonetary flows. This way I'm always looking at the total cost of ownership and flows into other realms vs simply the up-front cost of any item. I feel the latter is more consumer thinking.

oldbeyond
Posts: 247
Joined: Thu Nov 29, 2012 10:43 pm

Re: oldbeyond's journal

Post by oldbeyond »

TOC is always the way to go of course, but you can really only calculate it in retrospect, when you know how long you ended up owning the item, what you sold it for, what cash flow it generated or kept in your pocket etc. For most things I feel the upfront cost works well enough. For example, since my wardrobe has basically reached a climax stage, new purchases ~ depreciation, as I basically replace worn-out items, and do not add to my stock or change styles*. The bike at 1% of annual outflows is somewhere in the region where it might begin to make sense to add items to the balance sheet and depreciate them. Because I'm lazy, my limit is quite a bit higher, but a car for example would end up on the balance sheet.

For me it's quite unusual to be too stingy, I'm still more likely to buy unnecessary stuff than to hold off on useful purchases to make my budget**. Not tracking expenses definitely makes me spend more, and also to think much more about my spending (due to guilt and a lack of control). But since monetary transactions are easy to track and appear to tell the whole story because they're precise, it's very easy to focus to much on them.

*it's hip to be square
**as evidenced by my financial records ;)

classical_Liberal
Posts: 1519
Joined: Sun Mar 20, 2016 6:05 am

Re: oldbeyond's journal

Post by classical_Liberal »

oldbeyond wrote:
Wed May 06, 2020 11:07 am
But since monetary transactions are easy to track and appear to tell the whole story because they're precise, it's very easy to focus to much on them.
This, in a nutshell, is why I'm so fascinated with ERE accounting. I spent a great deal of time last year trying to equate monetary value with other flows. I was mostly unsuccessful. The best I can do is note any cashflow change as a result, but more importantly notate whether and where money is being pumped into other flows. Hence getting a general sense of the return of those flows into other areas.

Anyway, I know almost everyone likes the cash up front idea, and 1% of annual spending is so negligible it doesn't really matter. It's more of a concept thing. I'm looking at more major investments like 10 or 20% of annual spend when depreciating. It's really not that hard to figure out a reasonable straight line depreciation method for most items that get "used up". If you are a bit aggressive with it, generally there is a pleasant surprise upon completion. Maxing life span or resale value has a bit more meaning too, when you can actually realize some gains back from previous depreciation. Again, because we become what we track, this motivates good ERE behavior through out the ownership lifecycle instead of just the upfront cost.

This whole process of thinking is what is moving me past the wheaton level 5 sticking point into the higher levels. IOW, it helps me think in terms of maximizing system flows over upfront cost efficiency.

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