Generation-X' Journal

Where are you and where are you going?
Generation-X
Posts: 195
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Fri May 31, 2019 2:28 am

Jason wrote:
Mon May 27, 2019 10:47 am
...I think this whole trade war thing is Trump creating volatility until we get closer to the election at which he will strike deal in order to play savior and markets will spike...
Great observation, Jason.

And Trump is also getting very predictable. He is creating yet another headline (tariffs against Mexico) to obscure his weak position against Mueller's public statement and the subject of impeachment.

Though for the wrong reasons, this economy may end up getting what is really needs, which is for the valuations to come back down to earth.
Once triggered, this will be a very painful process. I do not believe his so-called base will remain loyal in its aftermath.

I am currently in a long put and in the money. I will be watching the market open with interest.

"...there's no sense in telling me... The wisdom of a fool won't set you free... But that's the way that it goes... And it's what nobody knows... Well every day my confusion grows..."
https://www.youtube.com/watch?v=bb-PLYQRJkw

Jason
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Re: Generation-X' Journal

Post by Jason » Sat Jun 08, 2019 7:10 am

Generation-X wrote:
Fri May 31, 2019 2:28 am
And Trump is also getting very predictable. He is creating yet another headline (tariffs against Mexico) to obscure his weak position against Mueller's public statement and the subject of impeachment.
I think he is testing the impact his statements/threats have on the markets and to what extent he can push them to a brink without a collapse. Mexico was a scrimmage as he learns to what extent he can play hero ball against himself.

Generation-X
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Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Tue Jun 11, 2019 7:40 am

It was a good run, while it lasted..

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."

Generation-X
Posts: 195
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Re: Generation-X' Journal

Post by Generation-X » Tue Jun 11, 2019 8:11 am

Test run - mobile living

I've been spending a few days here and there on a test run to check the feasibility of full time mobile living while working.

Let's just say at times, it's been miserable but I stuck with it and gathered some valuable insights.


1. Vehicle related - stealth, temperature control, sleeping ergonomics

One of the important aspects of mobile full timing turns out to be stealth. Being in a normal car with rear and back privacy windows helped tremendously.

A regular car effortlessly blended in and became a part of the everyday urban landscape while a larger vehicle such as a van, naturally drew attention due to its size.

Temperature control is a must. California is a desert and there is a large temperature differential between day and night time. Having the flexibility of AC during the day and heat at night is necessary.

One can opt for heat at night, so long as there is a place to be during the day that is temperature controlled.

A proper bed in the vehicle needs to be arranged, preferably on a permanent basis. It used to be that a reclined front seat was all that was needed for a comfortable night's sleep. But, not so in newer cars, with their "modern" ergonomics.


2. Shower, Bathroom and having a place to hang out

Pretty straight forward - access to shower and restroom is mandatory. Another aspect that quickly became apparent, is having a place to hang out. Because of the limited space in the car, it was mainly used for sleeping, changing clothes and driving.

The remainder of the time was spent outside, at places like restaurants, coffee shops, visiting people or outdoors for about 4-6 hours each day and at work.



So the management of mobile full timing is a full time job in itself. Having a pre-planned, fixed daily routine that works is important in making this lifestyle feasible.

Another aspect is the cost. The originally conceived intent of mobile of living was to address the personal needs while engaged in a long term travel. This meant having a vehicle equipped to provide facilities to cook, sleep and answer the call of the nature as needed.

Because that is still some time away, to make this work, a sweet spot needs to be identified that meets the need for both "stationary" and "mobile" mobile living - which is a hard task, especially when time is a solid constraint and a scarce resource due to work.

So instead of dealing with entire variables all at once, clearly, it is better to accept compromises in some of the variables that maximizes the utility for minimal cost and playing the trade-offs.


So at this point, my thought is to give up some conveniences as a trade-off to increase utility - i.e. end the "retirement budget" experiment and move from an apartment to a room instead and interweave the mobile living along with it.

This will retain the full benefits of real housing, yet provide a significant reduction in expense at the cost of convenience. To compensate, I will reduce and limit the time spent in the housing to sleeping and increase the time spent outside and in the mobile.

I'm glad I spent the time to try out the mobile experiment, and plan to explore more options moving forward.

wolf
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Location: Germany

Re: Generation-X' Journal

Post by wolf » Tue Jun 11, 2019 10:40 am

Thanks for sharing your experiences regarding your mobile living experiment. It's interesting.
What kind of further options do you wanna try out? I'm curious. Do you plan for a permanent change in living (during RE)?

Generation-X
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Re: Generation-X' Journal

Post by Generation-X » Mon Jun 17, 2019 5:21 am

It's a good question, and something that I've been thinking about for some time now.

The retirement budget experiment, to see if retirement income was actually adequate to live on (and it is, though I'd like a bit more comfort than what it currently provides for), re-emphasized my inherent dislike toward renting in general.

It feels quite restricting, to pay for over and over again, a simple four-sided shelter with a door, cooking and cleaning facilities.

Owning a property isn't any better either, for there is a perpetual payment of tax, insurance and maintenance for as long as the property is owned, with added bonus of liability - though it does serve as a mediocre medium of storage so long as buying and selling of property is timed correctly.

In either case, it's just a shelter, with conveniences. What ERE has shown me if anything, is that if you can cut down the biggest expenditures in life - housing and transportation immediately comes to mind - you can save money. The third, of course, is healthcare, followed by food and cost of education.

If one understands one's own limitations on what's acceptable in terms of risk, cost, comfort and convenience on these expenditures, then these expenses can be tailored to suit one's needs while saving money.

I have in good confidence, that if it weren't for the employment that tethers me to a fixed locality, that I would have gone rouge quite some time ago.

I am used to traveling and outdoors, and I have been car camping for recreation for a long while. This is my comfort level. What I don't know, is to what degree the comfort level needs to be tailored to, to suit car camping on a permanent basis.

One of the "wish list" or a "bucket list" of items to accomplish after retirement is to visit all the national parks in the country.

https://www.washingtonpost.com/news/won ... 8da73aa214

A part of the reason for the mobile living experiment is to incrementally transition to this task after retirement and also to find the right combination of methods and solutions that will work for this journey before I start. (And to increase savings while working)

Whether the mobile living takes on a form of a class B RV or a Hybrid Crossover will be examined. Solutions for various challenges will be looked at one at a time, as much as possible, as the time allows.

It may be decided that the best approach to accomplish the task is to break it in sections rather than in one lump sum. If this is the case, I may decide to alter the work arrangement to better accommodate the wish list activities, after minimum ERE is achieved in a year or so.

I may continue to work but take a month off from work couple of times a year, or take couple of months off from work altogether. After minimum ERE, work will become optional and the priorities will be re-arranged, centered around personal needs over work needs.

The others on the wish list is to complete PCT (Pacific Crest Trail), AT (Appalachian Trail) and ADT (American Discovery Trail - most likely on a bicycle). Fortunately, I have been able to maintain a reasonable state of health thus far, with these wish lists in mind.

Image
hiking on PCT last weekend

It is probably true that all of these activities are easier to accomplish earlier than later. And they will require taking more than a month off from work to accomplish. At this juncture, I may be fully dedicated toward retirement.


Here is one of the items to work on for mobile living: https://www.youtube.com/watch?v=Nj-03tH6p2w

Generation-X
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Re: Generation-X' Journal

Post by Generation-X » Sat Jun 22, 2019 2:47 am

In life, there is always someone that's well ahead of you.. surprise surprise.

I Lived In My Truck For A Year, Saved $85K
https://www.youtube.com/watch?v=LW6QwgCQmN8

The Homeless Firefighter
https://www.youtube.com/channel/UC-v_Bx ... vpw/videos

Cheepnis
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Re: Generation-X' Journal

Post by Cheepnis » Sat Jun 22, 2019 8:36 am

Thank you for posting those links. It's always inspiring to me to see people living their best life.

The work tying you down vs. not actually wanting to be tied down paradox is tricky. I think the van living experiment is a great half measure compromise for the time being.

Have you ever read any of the Living A FI blog? He's got a good post about taking long breaks during your working career and how they don't actually impact your future projections as much as you'd think. https://livingafi.com/2014/04/27/how-to ... ire-early/

Generation-X
Posts: 195
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Sat Jul 20, 2019 11:18 pm

Image
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S&P total Return Histogram 1926 - 2017
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Total No. of years: 92
No. of years with loss: 24
No. of years with gain: 68
No. of years with >10% gain: 54

Percentage of years with >10% gain: 54/92 = 0.58 or about 0.6...

Generation-X
Posts: 195
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Sun Jul 21, 2019 1:12 am

Very interesting thread on how people achieved their wealth:

If your net worth is over $3 million, how did you do it?

https://www.bogleheads.org/forum/viewto ... be323f3c03

Mister Imperceptible
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Re: Generation-X' Journal

Post by Mister Imperceptible » Tue Jul 23, 2019 10:44 am

How’s the mobile experiment, Half Kelly?

Generation-X
Posts: 195
Joined: Mon May 06, 2013 4:43 am

Re: Generation-X' Journal

Post by Generation-X » Thu Jul 25, 2019 12:26 am

Cheepnis wrote:
Sat Jun 22, 2019 8:36 am

The work tying you down vs. not actually wanting to be tied down paradox is tricky. I think the van living experiment is a great half measure compromise for the time being.

Have you ever read any of the Living A FI blog? He's got a good post about taking long breaks during your working career and how they don't actually impact your future projections as much as you'd think. https://livingafi.com/2014/04/27/how-to ... ire-early/
Thanks for a great insight - I think I'll be needing that. I've been doing similar research of my own, mostly talking to many people that I know that have retired.

The consensus was that if they were to do it over again, they would have retired earlier. But for most of them, 'early' meant around age 60.

A lot of them stayed on longer to secure a stronger financial footing prior to retirement, perhaps overly so - and it makes sense.

Most waited to have the house paid off or close to it, and to have a combined household monthly income of at least $5000 or more, through some type of pension. Beyond that, most didn't have extensive savings - maybe around 250k or so.

Many delayed retirement to near age 65 so that they could continue the healthcare coverage under medicare.


Looking at my situation, the earliest window for retirement would mean:

- at an income level around 300% Federal Poverty Level (FPL)
- healthcare coverage
- around 500k in savings, mostly pre-tax.

What the retirement budget experiment has shown me is that, yes, I could live at an expected retirement income level of 300% Federal Poverty. I would be renting, in a somewhat below average neighborhood.

The income at 300% FPL will cover the basic cost of living for food, shelter, utilities and transportation:

Scenario 1 - Renting

Net monthly income: $2,600

Rent: $1000
Food: $500
Insurance: $200
Gas: $240
Phone: $80
Electricity: $80
Internet: $50
Total Monthly Cost of Living Expenses: $2,150

Left over: $450 (This would be the car payment should there be one)

Scenario 1 is feasible, though there isn't much wiggle room.


Scenario 2 - Purchasing a 450k house (current going price) in a decent neighborhood

Net monthly income: $2,600

Mortgage, Insurance, Property Tax, 30Yr, 20% down: $2,300
House maintenance cost: $400

Food: $500
Insurance: $200
Gas: $240
Phone: $80
Internet: $50
Electricity: $120
Trash: $100
Water: $100

Additional Funds required: -$1,500/mo. x 12 / $300,000 (after tax) = 6% withdrawal rate on savings.

Clearly, to cover the expenses in Scenario 2 without tapping into the savings, a monthly income of at least $4,000 is needed. $5,000 a month would provide some wiggle room.

This is all just for a shelter (!) It's not an exaggeration to say that people work their entire lives just to pay off their mortgage.

Of course there are options, i.e., purchase a cheaper house in a not-so-nice neighborhood, buy a condo, or relocate out of state to a cheaper area etc. But in the end, the solution will involve some form of reduction in standard of living or a complete lifestyle change as a result of moving.

Having gone through the Retirement Budget Experiment, I found that while I can live and tolerate the standard of living that 300% Federal Poverty Level provides, I do prefer a bit more comfort than that. And I'd prefer to live in a nicer neighborhood in retirement.

300% FPL in 2019 is about $37,500 / yr. or about $3,000 a month (before tax).

Retiring with a house that's paid-off and without a mortgage payment, 300% FPL at $3,000 a month is quite tolerable, as monthly life expenses amount to about 2/3 of that with about $600 left over each month at your disposal.

It is clear that the problem of shelter is the most important problem to resolve before retirement.

And this is reflected in the thoughts of many that have retired. They chose smaller savings in exchange for a paid off house.

My current thought is that I will likely delay the retirement while looking at the next 5 years as the retirement window.

The first objective will be to reach at least $4,000/mo. in net monthly retirement income. This will be reached in 2023 along with about 650k in savings.

Second objective will be to shift savings focus from pre-tax to after-tax starting next year.

While I will continue to live ERE minimalist lifestyle, I believe it is better to build cushion while the opportunity is available.

A 30 - 50% downturn in the real estate market would be ideal in the next few years. Same for the stock market.

The interest rate can no longer be raised drastically due to the 22 trillion federal debt. The only remaining variable then, is the price, which has already begun to fall.

My intuition tells me that the perfect storm forming, given the current state of mess that the country is in, both financially and politically.

It is clear that the problems are far beyond the capabilities of these political appointees to handle.

I will continue to save and look for opportunities to solve the shelter problem. I believe there is a high probability that it will be resolved within the next 5 years.
Last edited by Generation-X on Thu Jul 25, 2019 12:48 am, edited 1 time in total.

Generation-X
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Re: Generation-X' Journal

Post by Generation-X » Thu Jul 25, 2019 12:42 am

Mister Imperceptible wrote:
Tue Jul 23, 2019 10:44 am
How’s the mobile experiment, Half Kelly?
I am preparing to move from an apartment to a room for rent though not real soon. Though if the bottom falls out of the real estate market, then anything is possible.

Second thing I've been actively pursuing lately has been in seeking out alternate activities and/or places to hang out outside of the primary shelter after work.

I am creating a list, and shooting for at least seven variations that can be applied after work. I am also keeping an eye out for a hybrid mini van that maybe coming out from toyota for after retirement.

The plan is to reduce expenses as much as possible, while building a cushion beyond what I need for ERE, even if it means pushing out the retirement a few years.

And MI? How are things with you?

Mister Imperceptible
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Re: Generation-X' Journal

Post by Mister Imperceptible » Thu Jul 25, 2019 12:50 pm

I am well, the RV is not being used currently as a work change to a less remote location made staying with friends and family more economical. I did not find any dead mice come spring time, which is fortunate. I have debated selling it but I have not needed the money and I cannot be certain I won’t be able to derive more utility from it.

I’ve become very familiar with theta bleed and most of my original long puts I established in the spring with an expiry of 2020 were liquidated at a loss and new positions were established at higher market valuations with 2021 expiries.

My original OTM calls on the GDXJ are up over 200% and the ones I purchased after the technical breakthru above the six-year resistance range of 1350-1380 are only up around 50%, now that the GVZ is back in double digits. I wish I had had the courage to be more concentrated and establish more longs when fewer market participants agreed with me. There’s perhaps much room to run.

Generation-X
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Re: Generation-X' Journal

Post by Generation-X » Tue Aug 06, 2019 12:31 am

According to Daniel Bernoulli, "in the absence of the unusual, the utility resulting from any small increase in wealth will be inversely proportionate to the quantity of goods previously possessed." Your uncertainty in the marginal utility of the RV sounds like a delightful problem to have.

Congratulations in the long puts position in the market and long calls in gold. Hopefully continued downfall of the market will be more than enough to make up for the previous experience in the options theta. ( Looking at the current situation, it appears delta, vega and rho are likely to be in your favor )

Stay rational and you should be able to avoid the herd of lemmings. ( coincidentally, humans make better lemmings and it's not a myth!* )

Image

* "Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."
Last edited by Generation-X on Thu Aug 08, 2019 4:52 am, edited 2 times in total.

Generation-X
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Re: Generation-X' Journal

Post by Generation-X » Wed Aug 07, 2019 12:44 am

4 former Fed chiefs issue stark warning: US central bank must be independent
https://www.wsj.com/articles/america-ne ... 1565045308


This is interesting not because of the warning but that there was a warning at all. Why the warning all of a sudden?
https://www.cnbc.com/2019/08/06/trump-i ... ports.html
https://www.washingtonpost.com/business ... edirect=on


And the key to the answer may have been presented in the following article:
https://www.nytimes.com/2019/08/03/opin ... nkish.html


This is a fool's market. We are entering into a recession.

Generation-X
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Re: Generation-X' Journal

Post by Generation-X » Thu Aug 08, 2019 6:46 am

Many will be looking at FOMC rate changes towards the end of the year.

Currently, 10yr - 2 yr treasury stands at 0.16 as of 8/6/19.
https://fred.stlouisfed.org/series/T10Y2Y

Traders are predicting at least 2-3 rate cuts by the end of January 2020.
https://www.cmegroup.com/trading/intere ... -fomc.html

Using history as a guide, we may have the last hurrah in the market before it spirals down perhaps mid next year.

I will be shifting to after-tax savings focus earlier than planned and will start immediately.

Will also be looking for an entry to place long put as the market moves up and volatility eases towards the end of the year.

Will be looking for a minor correction in gold for long calls.

Mister Imperceptible
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Re: Generation-X' Journal

Post by Mister Imperceptible » Thu Aug 08, 2019 1:43 pm

The Daily PM Market Commentary by “davefairtex” of Peak Prosperity might be of interest to you.

https://www.peakprosperity.com/forums/p ... ld-silver/

Mister Imperceptible
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Re: Generation-X' Journal

Post by Mister Imperceptible » Fri Sep 20, 2019 7:46 am

Generation-X wrote:
Thu Aug 08, 2019 6:46 am
Will be looking for a minor correction in gold for long calls.
For the 4th straight day, the Fed is going inject billions of dollars into the repo market so the international banking system does not seize up. They don’t have to “print” the money. Only a few keyboard strokes and billions, eventually trillions, of dollars will come into existence.

I know you have been waiting for the deflation. Some people have been waiting since 2009 for another deflation. They will not let it happen.

GDXJ hit 167 back in 2011, when gold fell just short of 2000 an ounce. We are going to go well past 2000. GDXJ closed yesterday at 38.17. Everyone is asleep.

SIL and SILJ outperformed both GDX and GDXJ in 2016 in the last global manufacturing recession.

Either way. You have worked so hard. You deserve a good retirement. Hop aboard the train, my friend, it goes full speed ahead.

Edit: I had never purchased GDX, but rather GDXJ, SIL, SILJ, SGDM, and SGDJ. The large debts on the balance sheets of megacap miners is what turned me off to GDX and I instead elected for SGDM because it is factor based and among those factors is low debt. I went to buy GDX this morning for the first time and I was informed that margin is required to purchase GDX. I haven’t dug up the reasons why but I am guessing it is because they want to saddle the investor with some of the debt if things go wrong. So I just bought more SIL and GDXJ.

Generation-X
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Re: Generation-X' Journal

Post by Generation-X » Fri Sep 20, 2019 11:50 pm

MI, how are things?

I do believe it is time to be long on gold again, last I held gold was after the dot-com bubble. During the dot-com days, gold spot was between $2-$300/oz.

GLD crashed just before reaching $100 ($1000/oz) and not many thought it would reach beyond $100 again - the memory of the earlier mini crash was just too fresh. GLD shot up past $180 ($1800/oz). I missed the boat.

No one thought the fed would continuously pump money into the system for over 10 years straight via quantitative easing. GLD shot up right along with it - but not before crashing along with the market during the housing crisis in 2008.

It was the quantitative easing - the QE1, ZIRP, Operation Twist, QE3 etc. that brought about inflationary fears which launched gold prices right up to $1900/oz. when it crashed before reaching $2000/oz., the psychological level.

Since inception in 2004, GLD has pretty much outperformed the index (dow, sp500), starting at the inception price of $45/share using price alone. DIA was around $100/share in 2004. GLD is currently $140/share and DIA $270/share.

Image

Factoring in dividends, at present, DIA is probably ahead of GLD in terms of overall return. GLD does not have dividends. In terms of highest return achieved between 2004 to present, GLD easily takes the cake, reaching $190/share from $45/share.

The gold is a trading instrument of safety when the system is broken. When Fed is losing control, the market reacts by flight to safety - GLD (and SLV). I believe we are getting there again. All it takes is one little something to get the first piece to fall.

(Yes, I purchased GDXJ and SILJ in the last pullback). I decided against purchasing options and bought the actual shares, as timing of these things are very difficult to predict. Especially SILJ, at these prices, it was an easy decision.

I will wait while the planets align, and when the time is ripe, I will collect the fruit.

BTW, what I fear is hyper-inflation. It is my full intention to convert fiat to real assets as soon as possible, when the first deflationary window presents itself. A house (real estate) is a good start, preferably on a land with a small farm with its own water supply.

I believe the Mormon method might be useful here (having a cache of goods just incase) to ride out the storm if possible. I am not certain that if things get truly dicey, if my pension will be worth anything at all. But I have to cover both scenarios.

Looking at these clowns in charge, both in the White house and the Federal Reserve, (not to mention in other branches of gov't that are plainly corrupt with conflict of interest) I believe we are due for a sharp rise in price of gold.

You can not fool the market easily and not for long - for the market always gets the last laugh.

It appears, that the market is beginning to lose faith in the system.

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