Trailblazer's Journal

Where are you and where are you going?
trailblazer
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Re: Trailblazer's Journal

Post by trailblazer »

End of Year Update

I’ve been taking a ton of career risk due to the confidence that my knowledge of ERE principles has provided such as telling clients I’m not interested in certain projects (something I never would have done in a prior life). One client in particular was aghast, but it actually led to us rescoping the project in a way that is better for both them and me.

I’ve made it 9 months so far with the start up adventure. It is by far the hardest I’ve ever worked. I’m feeling optimistic heading into the new year. Some of the more stressful client situations are gradually getting to a better place, and I still have a strong conviction that I’m working with people that I want to have a long term connection with.

While I’m always open to new adventures, sticking with the current venture for at least 3 years will pay off financially and also in skill and relationship development. I’d struggle to find another activity that requires as much daily real life problem solving.

In terms of net worth I’m at roughly 330K. In other words even for the year (actually down 15K!) Given how hard I worked I feel like it should have grown, but spending has been obscene (6500+ per month, half of that rent) and international value stocks have had a terrible year (I’m roughly 80 percent+ international).

I’m all in on stocks right now (except for about 15k crypto haha I’m not giving up on that). Still focused on global value - lots of GVAL and IVAL with a bit of IMOM thrown in. No idea what the market does next but won’t be selling for at least 10 years. I think this is the right long term approach so will be sticking with it. I can feel myself maturing in terms of handling drawdowns with equanimity, though I doubt I would be so calm if I had no income coming in.

I read the book 100 Baggers by Chris Mayer. If you invest 10K in a stock and it goes up 100x, you will have a million. I’m slowly devoting some of my portfolio to 10K long-term bets. Good inspiration from the quarterly shareholder letter from Maran Capital - I’m invested in several of the same stocks.

Goals for 2019 include lots of reading, continued focus on personal relationship development, and greater physical activity. I still use ERE more as an insurance policy (I can quit work anytime I want as long as I don’t spend too much!) rather than an integrated-web-of-goals-way-of-life, so more work to be done in that regard.

classical_Liberal
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Re: Trailblazer's Journal

Post by classical_Liberal »

You've accomplished tons this year, despite spending, by reintegrating work into your life. It's amazing how often people reach FU/FI, then end up seeking out a challenge in the workforce again later.

I'm curious though. If you can quantify this question. How much of your current enjoyment of the start up project is related to being FI? Put a different way, do you think you'd be happy with this circumstance if you HAD to do this because you were up to the nose in debt?

wolf
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Re: Trailblazer's Journal

Post by wolf »

Would you say, that your investment strategy is similiar to the Barbelly Strategy? I've read about it yesterday (https://thedeepdish.org/advanced-invest ... -strategy/). I could imagine myself implementing it. So a portfolio would consists of 70-90% "safe" investments and 10-30% speculative positions.

trailblazer
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Re: Trailblazer's Journal

Post by trailblazer »

Thank c_L - close to 100% of the enjoyment is due to FI. When I finished school and started my career I had over 170K in debt. My starting salary was 60K, I hated the job, and things felt pretty hopeless. I now have enough to survive (and even “thrive” if I fully follow ERE principles). I just had a performance review with the partners in our venture. I was bold about saying what I wanted: flexibility and enough time off to pursue personal interests and other random adventures. Plus a more meaningful stake in our venture. They agreed to extended time off in the near future and more equity.

I recently read a Warren Buffett quote along the lines of “highly successful people say no to just about everything.” I think that’s true. Much easier to do that with at least a base amount of FI.

Hi @wolf. I’m very enamored by the barbell idea. Right now I’m 100 percent equity, so I don’t think I can claim credit for a barbell. My fantasy portfolio - if I woke up tomorrow with a million dollars of cash sitting in a brokerage account - would be 400K in a permanent portfolio (as robust an asset allocation as anyone could hope for), 500K in global equity and 100K devoted to speculation (mostly small caps with long term potential). For now I’m buying global equity and slowly building the speculative holdings until I hit about 600K, and will then invest all excess in permament portfolio.

@c_L and @wolf - really appreciate all your comments in this forum!

trailblazer
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Joined: Sun Jan 03, 2016 8:18 pm

One More Year

Post by trailblazer »

One More Year

I continue to read the ERE forums regularly and am probably the poster child of a lurker - thanks to everyone who posts daily - the quality and general sobriety of dialogue is quite unique.

I’m finishing my first year of start-up life, and leaning toward signing up for year #2.

Highlights and Go-Forward Thought Process:


- I survived (and even succeeded) on several stressful client projects. I’m facing a couple of new client situations that will be challenging in different ways. I want to leverage what I learned on the prior projects and prove to myself that succeeding on the recent projects was not a fluke.

- I’ve identified areas for continued personal growth that will be important to improve if I want to be actively engaged in society going forward (as an introvert, I’m not sure I want to, but may as well keep the option open). In particular, learning to be more direct/demanding/non-apologetic with clients and vendors - I tend to be somewhat passive in difficult situations, although I do have tenacity. In other words, I want to get better at navigating challenging interpersonal situations. It’s hard to improve on this without throwing myself into real life messes, and work gives me a chance to do this.

- I want to root out all emotional immaturity (e.g., a colleague makes a big sale and I feel envy, a junior colleague demonstrates a skill I don’t have and I feel insecure, or I get mad at a petty client comment). I think I react to these things in a fairly normal manner, but to really be a dynamic leader at some point it’s important to be ruthless at catching myself and correcting my thinking.

- High level of optimism about our future business prospects - we are meeting an unmet demand in the market, and given the booming local economy, sticking with this for 1 to 2 years will start to pay off in terms of both vested equity value and immediate personal cash flow. It’s insane how much general need there is right now at companies for competent help at getting things done. (I fully realize this is an ERE site, but if you are still relatively young and have a concrete professional skill to offer, companies in the Bay Area/SV need help in so many areas.)

- I have quite a few ideas forming for both our current business and my own future, but they are all half baked. Another year will push these ideas to a greater level of development.

- My biggest confidence boost has been several presentations I was “forced” to give, much to my dismay/complaining and with much anxiety. I ended up delivering effective presentations and I want to build this skill.

- I originally agreed to this job because I admire the senior leadership. I admire them even more after one year and would be very hesitant to throw this away. At the same time, I feel frustration that they will always be the senior folks, and feel a desire to upgrade myself to their level of effectiveness.

- I feel confident because I know I can quit at anytime due to a bare-bones level of FI. Compared to when I had 170K+ in student loan debt, I like where I sit at the moment.

Personally:

- Net worth is sitting at $350K - in one more year I can conceivably pass 425K (assuming flat market and current spending levels) and not including any appreciation of vested equity in our business.

- Spending remains at about $6K per month (half of that rent and the other half paying for convenience - e.g., pre-made food, housekeeping, etc. I have perfect 100 walk and transit scores and am in a fantastic location). If not working, I would immediately move and chop total spending down to $1,500/month, but for now the convenience seems priceless. I could easily trim this down to $5K with no real sacrifice, but it doesn’t seem worth the effort).

- Physically I still have improvements to make, but generally have calorie consumption under control and am slowly building back up a strength training routine.

- Socially I’m slowly improving, or at least developing awareness. I would still like more regular social interaction outside of work. For many years I denied I even wanted this, but now that I realize I do, I’m slowly realizing who my core friends are and making an effort to gradually build these relationships. I’m quite extreme on the introvert scale so will take time to build this up. I also increasingly want a “personal relationship” if you know what I mean, and am making that a priority for the coming year. I can’t imagine ever entering into a formal "contractual” relationship like marriage, but would like to move a bit closer to the societal norm in terms of committing to someone.

- I place huge value on having free time to read. My goal is 2 books per week and so far I’ve been able to maintain this while working. I would quit the job immediately if I could not. I’ve shifted to mostly literary fiction (80%) and re-reading non-fiction, business-related books I’ve learned from in the past (20%). Much pulp fiction is an utter waste - better to watch good TV shows - but truly well written fiction is a balm that helps me move through life, remain calm, and see nuance and depth in the people I meet and situations I encounter. I can feel the difference when I stop reading it for a few days.

classical_Liberal
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Re: Trailblazer's Journal

Post by classical_Liberal »

Glad to read you're still making a ton of personal progress! It's amazing how synergized life can become for someone when personal and professional goals become intertwined and feed off of one another. I think there is a lot for me to learn from your life choices over the past 2-3 years.

Have you read @sustainablehappiness Journal? He seems to have taken a similar path to you, except with a family. Some time off, followed by a reshuffling of priorities, then on to work that is more meaningful and fits better into personal goals.

Cheepnis
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Re: Trailblazer's Journal

Post by Cheepnis »

Sounds like you're in a great place! I haven't familiarized myself with your whole journal but a 75% drop in spending like you propose is a lot. While it sounds you could make up half your projected spending reduction in housing alone, have you ever actually lived on $1500/m? Might be a good idea to try to get your spending, housing excluded, within your projected range for a dry run. A statement like
I could easily trim this down to $5K with no real sacrifice, but it doesn’t seem worth the effort
seems contradictory to me and perhaps a red flag if you're planning on giving up those conveniences for your bare-bones FI situation.

prognastat
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Re: Trailblazer's Journal

Post by prognastat »

Without doing a dry run I would be very skeptical about assumptions about what you could and couldn't achieve at some point in the future.

I thought I would be able to manage living on 1 Jacob after divorce by downgrading a bunch of things about my lifestyle during the transition and while I was indeed able to cut it down a lot. If I took 50% of our average combined spending before I am now averaging less than have the previous per person spending. I haven't managed to spend as little as 1 Jacob a single month yet though. Hell just the rent + utilities for my bedroom puts me at 1 Jacob.

So definitely would recommend a dry run before making decisions based on assumptions on what you'd be able to achieve.

classical_Liberal
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Re: Trailblazer's Journal

Post by classical_Liberal »

prognastat wrote:
Mon Apr 08, 2019 8:56 pm
So definitely would recommend a dry run before making decisions based on assumptions on what you'd be able to achieve.
@Trailblazer was living on $2500/mo with $1400/mo SF bay area rent when he started this journal. So, for him to assume $1500 monthly expenses in a lower COL area, without work related expenses, is pretty reasonable, IMO.

prognastat
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Re: Trailblazer's Journal

Post by prognastat »

I'm not saying drastic improvements can't be made, just pointing out that there's a big difference between I could theoretically get it down to X and actually getting it down to X in my own experience. In my situation I was able to get my spending much closer to X than my to my original spending so still very much a success for the most part, but also required adjusting some assumptions slightly to make the framework I was working from more accurate. I mean the pure amount is surely doable. I'm in a MCOL area and manage to spend less than 1k per month and suspect it will average out to around 900 or less a month over the first year. But I was also aiming for closer to 600 a month as a goal for base spending which i didn't quite manage to achieve. I would say at the very bare bones I would need 700 thus failing my original hope.

Just saying that if possible doing a dry run and implementing as many of the changes you intend before actually going through with the plan isn't a bad thing to try first. Of course this doesn't necessarily work for moving to a LCOL area if your job isn't one that allows remote work, but you can still live the way you would be in this other location to see if you can keep the other parts of your spending in line with your plans.

classical_Liberal
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Re: Trailblazer's Journal

Post by classical_Liberal »

@prognast
I agree dry runs are helpful, but in this particular case, he's already done similar in the past. Also agree what you think you can do, and what you actually do are often not in sync.

Still, consider that necessity is the mother of invention. There is also very much an internal interplay of personal microeconomics that happens when time is scarce and money is not. In the reverse situation, a premium is put on money, so decisions are drastically altered.

Interesting side note, I wonder what percentage of people who really want to reach 1-Jacob of spending, actually could, given unlimited time to learn?

prognastat
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Re: Trailblazer's Journal

Post by prognastat »

I could probably in a few manners:
1) Improving my social skills and capital and do some G&J style couch surfing drastically reducing my rent which is the vast majority of what is left of my expenses.
2) If I moved to a lower cost of living area I would easily be down to 1 Jacob even at the same lifestyle I'm currently at. Currently though this would mean giving up my job and likely ending up with a lower income in the LCOL area negating the benefit.
3) I could find a new partner and end up splitting my part of the rent in half.

On top of this if I was stronger in will I would already be able to get closer to $700 a month even given no change in rent, but I tend to still spend some money on entertainment and some excess on food beyond the bare nutritional necessities. In the end the question is how badly do you really want to get your spending that low and I this differs for every person.

classical_Liberal
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Re: Trailblazer's Journal

Post by classical_Liberal »

Yeah, I'm not sure I could. I mean, I see where I could immediately get from 1.5K to about 1K per month. However, that would mean an increase in hassle and time factor I'm just not willing to experience when working FT. Plus I'd lose on of my favorite hobbies. I suppose I could get another $100 a month off groceries, but then I'd be eating a ton of starchy staples and that may sacrifice health in the long term, so no go.

Maybe I'd be willing with unlimited time? Still if either of us could get to our posted numbers, we'd be FI, today! Yet neither of us is doing it. Why? Are we incapable? Is it hedonistic adaptation? Addiction? or are we simply intelligent economic actors, who are choosing based on our current preferences? (I think this is where @trailblazer is) or maybe the very insidious phenomenon, fear of long term failure?

trailblazer
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Re: Trailblazer's Journal

Post by trailblazer »

Thanks everyone for the dialogue! My current spending is designed to maximize convenience and eliminate all time and mental energy not spent on either 1) work or 2) intentional free time activities (e.g., reading, strength training, writing this journal entry, meditative walk, etc.). Convenience includes both time saved (e.g., housekeeper) and also time that would otherwise be spent procuring lower cost alternatives.

A few anecdotal examples to demonstrate my recent spending behavior:

Yesterday’s food (typical day) - $34
- Breakfast at Starbucks $8.50 for coffee + a breakfast item
- Lunch $12 local quick serve lunch
- Dinner $13.50 grab and go sushi tray + bottled drink

Weekend trip for family/personal reasons (trip was mandatory – huge social consequences if I didn’t show up)
- $750 for flight, car – paid more for direct flight leaving and returning at convenient (i.e., popular) days/times. Last minute rental car booking on busy weekend. If not working, would have shopped around, turned into slow travel trip, taken inconvenient flights, used public transport/share rides with others at the locale)
- $90 for Uber to and from airport (could have paid less than 10 each way using public transport)

Paid $90 extra for out-of-network dentist to avoid thinking/figuring out a new dentist when my work dental plan changed

$170 per month housekeeping

$600 for clothing items to wear at a couple work events + plus $45 extra for next day delivery – ordered online at the moment I needed without regard for pricing ($600 could probably cover my lifetime clothing budget if I didn’t feel the need to wear certain things for work :D)

If I see a book I want to read, I buy it.


Things I’m doing correctly:

- I don’t engage in retail therapy . . . all spending is the purchase of a convenience or a tool (like a book) I will use.
- I will pay for convenience, but ultimately buy only what I “need” . . . for example, I don’t pay for excesses like expensive hotels, flying business class on a leisure trip, buy $100 bottles of wine (or even $20), expensive clothing and accessories, etc.
- I’m not locked into any ongoing payment obligations, other than a relatively short apartment lease. At least in theory, every single expense I have could be immediately eliminated.
- Physical possessions are minimal – I’m about as mobile as a person can possibly be, both from a social/lifestyle perspective and also a physical possession standpoint.
- My housing – despite the enormous rent – is relatively “minimal” – a very basic studio apartment that happens to be in one of the world’s premier locations. It would not be a downgrade for me to move into a basic studio in a city with much lower rent (for a sense of just how expensive SF is, see https://www.zumper.com/blog/2019/03/zum ... pril-2019/ . . . average 1 bedroom rent is $3,700, and that number includes all of the less desirable neighborhoods)).

To be clear, I realize the total spending number is high and I don't claim any great heroics :D. My hope is that it naturally drifts down to $5K over the next several months (it's already drifted down from $6.5K when I started working again last year). I still have the $600 of clothes, and over time I'll figure out better routines with food, dentists, and whatever else. The biggest trade-offs I've considered, such as moving to a lower cost apartment, end of being just that: trade-offs. At the moment, it's easier to just pour myself into work and try to eventually ramp up earnings by a large amount.

If I quit . . .

For better or worse, I’m at least somewhat interested in business/finance, and thus I have a hard time imagining myself being fully disengaged from the workforce beyond a period of 12 months. I’m at a point in my career where I have enough of a resume, skillset and network that with some effort I should be able to find work that: 1) pays somewhat reasonably; 2) is in an acceptable location; and 3) with acceptable people.

What would happen if I quit my job? For the first year or so, spending would probably hover closer to $2K per month. (At least, that is what happened when I temporarily retired 2 years ago.) I would use that first year to optimize spending (optimizing spending essentially becomes my part-time job). I would also spend part of the time low-key searching for a future income/work opportunity. In order to permanently leave the workforce, I would need enough progress in that first year of optimizing spending, and also a growing sense of not wanting to engage in any form of paid commerce (which like I said, seems unlikely, or would require finding a non-monetary purpose that is so powerful as to make me not care one way or another about spending levels).

As c_L noted, my “best” ERE behavior began when I had about $50K of student loans left, and was just beginning to earn a reasonably good salary. I lived on about $2,500 per month, which included $1,400 SF rent (essentially living in a boarding house – also in a fantastic location but lacking in terms of comfort, cleanliness, or a bathroom to call my own). This was while working full time and included a decent amount of convenience spending. This got me to about $300K, which started to feel like enough to start taking some time off and exploring more unpredictable employment opportunities.

All this said, if not working, my ideal spending level is probably closer to MMM territory, perhaps in a more urban environment, so I’ll likely be in and out of the workforce for a while. I admire those that pull off the 1-Jacob level. It's something I doubt I will ever even try, though if forced to by circumstance, I think I see how one can get there. (Which of course completely misses the point of ERE - my understanding is that one is supposed to live on 1-Jacob and yet fully thrive as if living on a "normal" income. But in terms of raw dollars, there seems to be some basic mechanics one could follow if forced, and would definitely get more skilled at over time.)

@bigato - I like your thoughts on discovering the ideal number of close friends. I agree it's a small number (at least for me). I think two to three works for me as long as that is supplemented by a slightly larger number of good but more extended friends. Otherwise it's a big burden to put on those 2 to 3 folks (plus a big burden on myself!). I think where I'm lacking at the moment is having that small group locally. My handful of very best friends (the type of person I'd immediately text if something big happens) are all non-local.

trailblazer
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Re: Trailblazer's Journal

Post by trailblazer »

Time for an update - it's been a while!

I'm in Europe right now enjoying a 3 month break from work.

Net worth still sits right at 350K. Psychologically that always feels like "enough" to me and I lose all motivation to earn more income.

I'm supposed to go back to work next month. The senior guys/investors I work with have some ideas they want me to work on, and the income would be at least enough to finance a pretty good San Francisco lifestyle.

But ultimately I feel like the only way to truly do a "start up" is to be a co-founder. Otherwise you are just a glorified employee.

Next few weeks I need to decide.

The final few weeks of my "break" I'm heading to Asia for a pretty cool trip with some good friends. As discussed before, I've always sucked socially so really excited about this and thinking I want to prioritize relationships in the future.

classical_Liberal
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Re: Trailblazer's Journal

Post by classical_Liberal »

Glad to hear from you!! Looks like you're sticking to the all-on, all-off preference at this point. What made you decide it was time to take the months off? Burn out, tired, just felt the urge?

trailblazer
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Re: Trailblazer's Journal

Post by trailblazer »

classical_Liberal wrote:
Tue Oct 22, 2019 1:13 pm
What made you decide it was time to take the months off? Burn out, tired, just felt the urge?
A little of each, but I’ll go with “just felt the urge.” The start-up gig was beginning to feel a bit too much like traditional full-time employment, and I had an urge to hit the road and travel.

I’ve now wrapped up a few months of travel in Europe and Asia, and am back in SF working on some projects with the same guys I was working with before. It will fund a decent SF lifestyle for the time being and even allow a bit of saving.

For the next year or so I’m going to focus on 3 things. Social relationships, which have seen good momentum but still room to improve; physical fitness - getting there but need a final push to optimize; and continued focus on “vocational clarity” - I.e., what am I supposed to do with my life in terms of work? Not sure I’ll ever answer that but have a few hypothesis I want to test.

Hazel-is-ok
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Re: Trailblazer's Journal

Post by Hazel-is-ok »

Hi from another introvert :-) I think we're in the minority here.

I'm relatively new on the forums, and have been reading a few journals. I just read right through your journal. It's fascinating to see how things pan out over time. Particularly how many people go back to working.

I've been jotting down a few notes, considering whether to start my own journal. Will probably go for it :-)

classical_Liberal
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Re: Trailblazer's Journal

Post by classical_Liberal »

trailblazer wrote:
Wed Nov 13, 2019 7:15 pm
but have a few hypothesis I want to test.
I'm curious to read those, if you feel like sharing. Glad you enjoyed the time off and good luck on the next venture.

trailblazer
Posts: 122
Joined: Sun Jan 03, 2016 8:18 pm

Re: Trailblazer's Journal

Post by trailblazer »

classical_Liberal wrote:
Thu Nov 14, 2019 4:36 pm
I'm curious to read those, if you feel like sharing. Glad you enjoyed the time off and good luck on the next venture.
Thanks @c_L for your continued interest! I need to do a more detailed post, but in short part of me thinks I could do well in a truly entrepreneurial start-up type situation, but I need to test that. Maybe I just really like the concept not the reality . . . The last year or two I’ve essentially been working on building out someone else’s ideas . . . Haven’t truly had skin in the game.
Hazel-is-ok wrote:
Thu Nov 14, 2019 4:53 am

Hi from another introvert :-) I think we're in the minority here.

I'm relatively new on the forums, and have been reading a few journals. I just read right through your journal. It's fascinating to see how things pan out over time. Particularly how many people go back to working.

I've been jotting down a few notes, considering whether to start my own journal. Will probably go for it :-)
Thanks @Hazel-is-ok!

Definitely the introvert can seem like a minority in society . . . Jacob has a post on the blog I’ve thought back to many times where he shows how introversion is often described in terms that make it sound like a disorder. http://earlyretirementextreme.com/etrov ... otomy.html
That said, I do think there are quite a few introverts on this site . . . And the extroverts tend to be of the Intuitive-Thinking variety (E-N-T-X) which I think makes them natural friends of many I-N-T introverts like myself.

I see you did start a journal and look forward to reading more. It seems you made the search for “enlightenment” and a quality life your number one priority despite an educational/professional background that would likely push you in the opposite direction. Being a bit of an all-or-nothing person myself, it’s fun to hear about your journey.

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