Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Where are you and where are you going?
2Birds1Stone
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by 2Birds1Stone »

Oi, this spurred some good discussion. Glad I'm getting paid to unpack this stuff and try to respond in earnest.

@Axel, those conversations are all too familiar. When it's kids or people with kids, I get it. But adults obsessing what they bought each other (most of the time charged to a CC and making a payment), blows my mind. And in these social circles it was crazy, like really expensive trips, vehicles, a motorcycle (brand new HD), etc!

I think volunteering will be an important activity to get more involved within the communities which align more with my values. Community garden, habitat for humanity, there is a local MTB non-profit that hosts trail building days several times a month, etc. I would like to get more info on ENGO's and how I could possibly leverage sales/marketing skills to do stuff like fundraising, etc.

@J+G, damn dude, some really good insight there. Especially wrt to filtering who you interact with to a degree. Though at the same time, I wouldn't want to apply too much of a filter and either miss out on meeting some cool people, or even worse, creating an echo chamber of people who confirm my biases/keep my world view narrow.

Hi @R2F, thanks for the kind words and welcome to the forums. You'll find people here from all sorts of backgrounds and phases of life, but it's definitely a very interesting group. Many of us simply doing have people in the real world to discuss this stuff with, as you can see by the latest parts of this thread =D

@c_L, it's definitely a topic that's worthy of discussion and exploration. I too would love to meet more folks from the ERE boards. I was hoping to meet with Seppia and several other EU based folks along my travels this spring/summer, but Covid happened. I've met a few from the forums and it was great. I owe J+G a visit in NoLa when we make our way toward those parts. The ERE travel thread is an excellent idea, and if it weren't for a pandemic, I bet it would have taken off much more. Doing an extended meetup or trip together with similar minded people sounds like an absolute blast, so does hosting others.

On becoming a weirdo to attract weirdos, this is an excellent plan too. And maybe I'm still very normal by ERE forumite standards, in the real world here definitely feel like the weirdo. My problem has been, that because of Covid and the lack of in person socialization with new groups/people, it's like impossible to meet people! Especially since most people are taking risks of contact with familiar faces, and doing more to avoid "new" people. This is something that I hope to figure out how to navigate sooner than later, because who knows how long until "normal" comes, or what that might even look like.

@Ego, once again thank you. Your original piece of advice re: returning from long term travel was pure gold, so I appreciate you popping in again. It's like I was trying to heed it, and slipped into an old pattern anyway. The way DW and I relationship is, we find the silver lining in different things, and point it out to each other. So there is a benefit there. We discussed your advice again over the weekend, and I think we're on the same page right now, that we have to take things by day, but ultimately cannot let gravity keep us here in NY. She's a bit afraid of traveling/nomadic life while balancing her new career, and I on the other hand just don't want to lock into a high-cost, mobile lifestyle for the sake of doing so, if it means that it will impede her/our ability to be in a better position to jump off the paycheck teet in the future.

The thread you linked has sooooo many good lessons and reminders in it.

Here is something excellent we watched yesterday.

The Education of a Reluctant Businessman with Yvon Chouinard
https://youtu.be/NVfy2T0rzMc

2Birds1Stone
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by 2Birds1Stone »

ertyu wrote:
Fri Jan 01, 2021 9:22 am
time will tell.
Here we go!

ajcoleman22
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by ajcoleman22 »

Who knew you could predict the future. haha

ertyu
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by ertyu »

that was a single down day. but hey tsla's up 4% or something :lol: amusement never stops

AxelHeyst
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by AxelHeyst »

classical_Liberal wrote:
Sun Jan 03, 2021 1:10 am
AH, being raised a hippy and a self admitted dirtbag is another great way to meet a ton of people on the fringe. These types of people are not the normal acquaintances for someone coming down the Mainstream ---> FIRE ---> ERE pathway. IOW, me... and maybe 2B1S? Certainly others on the forum.

So, without significant background in other authentically "fringe"-type activities, how does one go about finding these people?
Quick clarification that is actually relevant to my point: I was raised conservative and borderline fundamentalist Christian, and was military obsessed in high school. I had to make my own way over to the hippies and dirtbags, and my path was from a more mainstream place. For example: in 2010 I was, technically speaking, a yuppie. Some roommates introduced me to climbing indoors with all the other yuppies. Flash forward 10 years, and almost none of my friends have a shred of conventionality to them. But the point is that it was a progression. Sort of like how you don't go from WL1 to WL7 in a month. 2010Axel would *not* have been able to hang with 2020Axel's friends.... or even 2020Axel, for that matter.

To my thinking, the core attribute of "the fringe" is dedication and commitment to whatever that group is in to. You cannot be "in" if you haven't authentically put in the investment. You'll be treated politely (probably) if you happen to show up and aren't too annoying, but you won't be respected and "in" -- part of the community -- if you haven't put in the time.

So, you are "in" here, cL, because you've obviously put in the dedication to ERE, you walk the walk, you've contributed to the community, you don't pose and spray about frugal stuff you haven't actually done, etc. I'm still in a probationary period because I've only been here a year - I talk okay, maybe, but god I don't know a single thing about investing and anyways we'll see if I'm here in 2 or 5 years. Then I'll be "in".

It's basically the same thing with IRL communities. Identify something you're in to, and then consistently put in the time and dedication over years, and one days you'll look around and realize you're a respected member of the community.

The trick is if "fringe" and "depth" are part of what you're after. You have to evaluate if what you're trying to get in to has that level of depth. And I think that has to do with how much of a demand the activity/lifestyle, um, demands. The reason dirtbagging is such a "deep" lifestyle is because it doesn't just demand that you climb a lot. Some people climb a lot, and that's great, but they're not dirtbags. Dirtbaggery demands that you sacrifice a real career, real housing, comfort, security, certain hygeine norms, and a number of other things. In an instant, when you notice the guy across the parking lot rolling out of the back of his beater truck and putting his pee bottle in the sun so it'll unfreeze so he can empty it, you know what he's given to climbing. He's all in.

I'm not suggesting that you have to go that deep just to find friends, just to indicate that dedication is a key variable here. I think you can get in to a lot of activities and not find "your people", but that's just because you haven't yet gone deep enough. You might just need to put in a little more time in the community, or orchestrate some event where you prove your dedication to get "in".

So to answer your question, I think a more precise way to put it is:
1. Find/pick/identify activities that you are interested in that have communities that have the potential to go a level of depth/fringeness you're looking for. Golf or tennis is probably not going to cut it here. Certain forms of bicycling and *actual* outdoor pursuits probably do. Anything that can have the word "activist" added to the end of it will work as well (bicycle riiiiggghtsss!), such as climate activism or gardening, if you're in to that. If you're hippie-oriented, go read the message board at your local food co-op and you'll get some ideas. If you're more red, find some gun-shootin' events. If you're a hipneck like me, do both. There's a big benefit here for finding activities that imply the rest of the lifestyle. That's why tennis is out: you can be frugal or a consumer whore, but still do tennis. You can't be a consumer whore climbing dirtbag (although there are a LOT of consumer whore climbers out there).
2. Show up and contribute consistently, don't be a loudmouth, listen more than you talk, assume you don't know what's up, be useful and cheerful but not obsequious, look for opportunities to contribute something that only you could bring, do not *ever* ask yourself "what's this community ever done for *me*, huh?", etc.
3. Do step 2 until you arrive at the fringe. It might take a while.
4. Welcome to the fringe. Here's your hat.

2Birds1Stone
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by 2Birds1Stone »

@AH, thank you for sharing your experience/perspective. The depth part will have to come organically, and at least personally, I wouldn't try to force a level that I don't arrive at "by accident". Which seems to be consistent with your steps above.

FOMO/STONKS?

About a month ago, an acquaintance from one of the hobby groups I'm part of off-line, invited me to a 2021 investment challenge. I hesitated, but accepted, after learning that it would be capped at a $1k seed. As part of the challenge, he created a private group chat, to share ideas, trades, etc throughout the year. I explained that my strategy will most likely be to just copy what I'm doing with my real portfolio (buy and hold index funds), and I don't think I'll provide much value to them. In turn, one of the other members, has been actively trading for quite some time, and apparently modestly successfully. I used the platform and opportunity to try to get inside his head and better understand how he makes his decisions/strategy. The explanation was part gut instinct, part TA, and mostly hand waving........but he posted his planned trades since Jan 4th, typically a day before executing, and holy shit, all but one panned out very well. My brother has also been leveraging his insider knowledge of his profession, to mostly day/swing trade highly volatile stocks in that sector and in 2020 vastly outperformed the broad market index funds. I've been spewing the bogleheads mantra of "it works great, until it doesn't" and have generally been against active investing/especially day trading, because that is what was ingrained over the past decade, and the handful of times I attempted to outsmart the market, I have gotten burned significantly. As a result, I've stuck to mostly passive index funds, with a very bearish/conservative portfolio. For anyone who follows the market, knows that such a portfolio grossly underperformed the high equity allocated portfolios over the past decade. So despite being against trying to outsmart the market, by holding a ton of cash/bonds have essentially used index funds to do exactly what I was supposedly against. Now, it's probably FOMO/fear of getting crushed by inflation in my large cash position, or just sheer stupidity, but I've decided to at least try to educate myself on a more active management of my portfolio, and use this $1k investment challenge as a tool to do so.

There seem to be many more proponents of active investing/trading here than other personal finance/financial freedom focused communities. So looking forward to learning from y'all too. Sometimes when I read the investment trade log thread, or someone like Lemur's journal, my head spins. Clearly I have a lot of learning to do, because while understanding the basic fundamentals of stock buying/selling, options, derivatives, and futures, are all completely foreign to me.

Since I'm stuck in front of a computer 8-9 hours a day anyway, and usually have between 2-6 of those hours to do whatever I want during work......this could be a good ROI on time spent.

If anyone here can recommend some good places to start learning (digitally), I would greatly appreciate it.

fingeek
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by fingeek »

That sounds good - At least you're using "fun money" portion to explore the possibility of daytrading/swingtrading, rather than relying on it. I do think it's possible to succeed with daytrading, though it takes time and discipline to get good at it.

Some random bits:
- "They say 90% of retail investors lose money"
- https://www.investopedia.com/ / https://www.investopedia.com/trading-sk ... ls-4689654
- https://tradingview.com/ is a good free charting software.
- Read a lot into "trader psychology", as it's far more important on the daytrading/swingtrading level.
- Read into win rate and risk:reward. As a crude example, your group member could have 9/10 win rate (9 wins, 1 loss), but if the risk:reward is skewed badly, and the 1 loss is worse than all 9 win profit put together... Well then you have a losing strategy long-term. Figuring this side of things out is arguable much more important than finding a strategy.
- Ideally set your buy point, limit order(take profit) and stop loss(worst lost) points up-front before the trade, set it all up, and then walk away from the screen - This will help avoid "meddling" with the trade.

Good luck, and keep us updated! Feel free to ask here/PM if you have specific questions that I might be able to help with too.

Western Red Cedar
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by Western Red Cedar »

2Birds1Stone wrote:
Tue Jan 12, 2021 7:09 am
I've been spewing the bogleheads mantra of "it works great, until it doesn't" and have generally been against active investing/especially day trading, because that is what was ingrained over the past decade, and the handful of times I attempted to outsmart the market, I have gotten burned significantly. As a result, I've stuck to mostly passive index funds, with a very bearish/conservative portfolio. For anyone who follows the market, knows that such a portfolio grossly underperformed the high equity allocated portfolios over the past decade. So despite being against trying to outsmart the market, by holding a ton of cash/bonds have essentially used index funds to do exactly what I was supposedly against. Now, it's probably FOMO/fear of getting crushed by inflation in my large cash position, or just sheer stupidity, but I've decided to at least try to educate myself on a more active management of my portfolio, and use this $1k investment challenge as a tool to do so.

There seem to be many more proponents of active investing/trading here than other personal finance/financial freedom focused communities. So looking forward to learning from y'all too. Sometimes when I read the investment trade log thread, or someone like Lemur's journal, my head spins. Clearly I have a lot of learning to do, because while understanding the basic fundamentals of stock buying/selling, options, derivatives, and futures, are all completely foreign to me.
Unfortunately I don't have a lot to offer on this front, but I've also been thinking a lot about my passive approach in light of all of the active investors on the forum. I noticed how conservative your asset allocation was a month or two back, which was a bit of a shocker consider your age and knowledge. It had me second guessing my own allocation for a bit.

I've been very hesitant to dip my toe into active trades because I tend to suffer from either analysis paralysis or regret my decisions after making them. I typically spend more than ten minutes in the beer aisle weighing the trade offs between price, quality, and location of different micro brews :D. Based on my own psychology, I know that I'm better off just riding the index and focusing on other strategies to produce income, minimize expenses, or improve my life.

2Birds1Stone
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by 2Birds1Stone »

Thank you for the resources and advice, fingeek. A friend recommended a podcast a few days ago, and I'm 10 episodes in. Based on a study done in Asia, using 400,000 retail investors, 99% lost money, If you looked at longer periods, ie 1+ year! I'm not sure when/if I'll actually attempt or implement this with more than this experiment, because much like @WRC I have terrible analysis paralysis and regret.

@WRC, my AA ended up so conservative because I pulled out a significant chunk of equities out in Feb, thought I was a market timing wiz by preventing 25% in losses, and then the market climbed right past my exit point and I have not reentered since.

Overall, I'm with you though. I don't want to rely on equities markets to live a life that's designed around much of what I've shared here over the past few months. ERE is not FIRE, my resilience will be based on many forms of capital and lifestyle design. Personally I think I'm much better suited to live purposefully on 1-2 JAFI and have a suboptimal portfolio, than try to squeeze out higher returns at the result of more volatility and emotional agita.

That being said, my AA is tilted much more aggressively in stock within the last bucket (old age retirement). Apatite for risk seems to be higher during period of regular income, which I suppose makes sense with the job acting like an ultra high yield bond. I trust that between compounding growth, and sporadic work/contributions to those Roth/Traditional IRA accounts, and increased SS from future income, the old age bucket will sort itself out. Our equities portfolio today is higher than our entire net worth just 4 years ago.

Here is a snapshot of where we're at right now.

US Stock 30.8%
Int Stock 9.4%
Bonds 13.4%
CD Ladder 21.9%
Cash - Liquid 7.8%
Cash - Pre-Tax 12.3%
Ag/Au 4.3%

The entirety of the pre-tax cash is wasting away in an IRA account. My priority is trying to figure out what to do with it, because between liquid cash and 5 year CD ladder, we can cover ~6 years of expenses. If it goes into some sort of equities, that would bring us up to 52%, which is a number I would feel comfortable maintaining due to extreme spending flexibility and current income situation.

ETA: Due to the discussion in @Scott 2's wrt SWR's, was curious to see how pathetic the calculations are in cFIREsim;

Portfolio exactly as it sits today, no SS = 2.55% "failsafe WR"
Portfolio with shift of pre-tax IRA into equities, no SS = 3.23% "failsafe WR"
Portfolio w/ shift into equities + reduced SS @ 70 y/o FRA = 3.46% "failsafe WR"

Looks like the biggest gain to a sustainable WR would come from shifting the AA to at least 50% equities, a 26% increase in spending. SS only adds another 7% on top of that. Nothing is certain, and to err on the side of caution, I predict will will draw <3% without any effort, and toss in some sporadic income, and be resilient in other ways.

classical_Liberal
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by classical_Liberal »

"Active" depends on your definition. If you sold equities when your IPS would indicate otherwise in Feb, you are technically actively investing as well. It's just you were actively managing your index funds. The problem here is that you never set a buy back in price, so you were actively managing your investments without any plan other than "equities are frothy, I should trim my holdings".

I'm not criticizing. It was half of a potentially great move, the half I mostly missed. It's just that since you didn't admit to yourself that you were actively managing, you had no plan. I was sitting 30% cash in Feb, once SHTF I had a plan about when to start buying. Basically we each had one part of the trade right :lol: .

Anyway, my point is that you don't need to have individual stocks to be an active investor. If you are active, make sure you admit it and have a plan. I basically have bands on my noncorrelation, in which I make bets on outcome based on macro economic conditions. For example, I'm at my lowest band point for long/Intermediate bonds at the moment because I think they have lots of downside with only a little upside. I see growth and inflation as the most likely mid term (1-2yr) prospects. So that's where I'm hedging my bets.

I've also set aside about 7.5% of total portfolio for completely active investing. This happened because I started making "pretend" trades, with very specific sell points a few years ago. I monitored them as if they were real. It turned out I regretted NOT making the trade most of the time. Ouch. Now that 7.5% is like a part time job to me. If I can make a few K a year actively managing it, great, it's income.

Anyway, having bands of asset types and pretend individual trades are a good, less risky way to actually create a plan and start (semi) active investing. For example, you say you want to allocate the cash in your IRA... To what? At what price points? Is there I point in which you'd change that allocation? IOW, have a plan so you can execute it when conditions are favorable.

Laura Ingalls
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by Laura Ingalls »

You are right that the ability to consistently live in the 1-2 JAFI and the personal capital to earn more money is probably more important than actual investment prowess.

However the more trips around the sun you make the more of your financial nest egg should be from gains, reinvested dividends, et al. Most of my money is held in Fidelity accounts and the app generates a little chart that shows what your balance would be if it was not invested. The not invested line looks like wide flat stairs. The invested line looks like a jagged pointy mountain. I like the mountain better even with its gyrations.

Your asset allocation looks rather conservative to me. But I am not you (While I am not counting on any inheritance I have a parent unlike to outlive her assets, I do feel that I will get at least some of the promised social security promised, I am vested in the best funded public employee pension in the country, and we own a modest little payed for house. All these make me less anxious about taking on market risk.

I think the biggest risk is that the Treasury has printed too much money and it’s going to bit all of us in the collective butts.

2Birds1Stone
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by 2Birds1Stone »

classical_Liberal wrote:
Wed Jan 13, 2021 1:57 pm
"Active" depends on your definition. If you sold equities when your IPS would indicate otherwise in Feb, you are technically actively investing as well. It's just you were actively managing your index funds. The problem here is that you never set a buy back in price, so you were actively managing your investments without any plan other than "equities are frothy, I should trim my holdings".

SNIP

Anyway, having bands of asset types and pretend individual trades are a good, less risky way to actually create a plan and start (semi) active investing. For example, you say you want to allocate the cash in your IRA... To what? At what price points? Is there I point in which you'd change that allocation? IOW, have a plan so you can execute it when conditions are favorable.
"So despite being against trying to outsmart the market, by holding a ton of cash/bonds have essentially used index funds to do exactly what I was supposedly against." - from Jan 12.

I totally get that by making my move I was being active. It was driven by fear/loss aversion, and then analysis paralysis.

WRT the IRA, I am not sure, that's part of the problem. I feel like the right thing to do would be get back into some kind of equity index fund to bring the portfolio back to my 50% prescribed allocation. My track record dictates that shortly after I do that, the market will take a colossal dump.

Thanks to other threads, I went down the permanent portfolio rabbit hole, and maybe I can implement that within the IRA account.

@Laura, thanks for your insight. That does make sense. If you can more reliably count on SS and a healthy pension, then equity risk/volatility should be much easier to stomach. In this interest rate environment, a $24k/yr pension is basically worth a high six figure bond allocation.

I definitely ended up with less equities than my IPS calls for (50% min, with a 60% long term goal). Had I not market timed in Feb, would have ended up right at the 55-60% allocation today, and quite a bit of that from gains that in reality I missed. Having gone against my IPS tells me, that maybe a 60% allocation to equities is too high for the long term. I will go to 50% and see how my stomach feels and sleep at night factor changes.

Ultimately the goal is not to rely on the WR%, and the there is a high likelihood of portfolio eventually going runaway mode if we work sporadically anyway.

Funktown

This week wore on my resolve a bit. Hoping that warmer weather and longer days bring more balance. Work is a bit chaotic as my company is going through an acquisition, and things are messy! There are days that I have almost nothing to do, and others where it's a constant barrage of meetings, calls, and emails.

I'm not ready to start looking for the escape hatch yet, but it's definitely time to plan for the possibility.

classical_Liberal
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Re: Semi-ERE Year 3 - Wanderlust vs. W-O-R-K

Post by classical_Liberal »

2Birds1Stone wrote:
Fri Jan 15, 2021 4:24 am
WRT the IRA, I am not sure, that's part of the problem. I feel like the right thing to do would be get back into some kind of equity index fund to bring the portfolio back to my 50% prescribed allocation. My track record dictates that shortly after I do that, the market will take a colossal dump.
Yeah, so this is where active vs passive matters. It's this kind of stuff that proves the JL Collins idea correct. Why didn't you do that back in March, April, and May 2020? Is your IPS good in theory, but bad for you in practice? Better to be completely passive within your risk tolerance, than making value judgements without a plan. If your IPS says your beneath your band on equities, and if you wanna remain passive, you should make the moves and not look back.

If you want to be more active, and feel valuations are high, set a price point for entry and be willing to wait. Or look for an option that has more value at this time. Or look at your personal situation and find a way your capital can be invested to reinforce a weak point. Constantly doing all three of these things generally provides you with options given a bit of time.

IMO mixing the two approaches leads to disaster, unless you place the capital in different mental buckets and can effectively manage them separately. I think this is hard for humans since we like to act on emotion.

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