Early Retirement Extreme Forums

A quick calculation tells me that if I save 100% of my current salary for 30 years I'll have 3 USDm (incl. 5% return)

In the same period at a 5% return my current investments will return around 11 USDm.

Makes me wonder if it's worth having the job.

June update

Cashflow
Expenses: $N/A
Dividends: $2,120 (+29.6% YoY)
Dividends TTM: $2,095 (+$40 MoM)
Projected annual dividend: N/A

Total networth gain (loss): +$66,629

Investment allocation
Equities: 52.3%
Real estate: 25.1%
Cash: 22.4%

Makes me wonder if it's worth having the job.

So why do you still have the job? Just asking.

Eureka wrote: ↑

Sun Aug 02, 2020 1:35 am

So why do you still have the job? Just asking.

Thanks for asking!

I guess there are a number of reasons.....

1) Making the jump can be hard (societal pressure/norms, I need to confront what I actually want out of life and what to do with my time (pretty though to figure out in my book, much easier to follow the initia of current work life))

2) I don't want to make a decision based on how I feel on a single day but rather based on how stuff feels during a longer period of time I guess. Things are bad some days and a lot better other days.

3) (and maybe most important) I haven't identified anything with higher RoT right now (return on time - measured in value, not money). While work is sometimes straining it also provides structure to my life, a purpose, colleagues, self-development.....

July update

Cashflow
Expenses: $N/A
Dividends: $1,383 (-14.9% YoY)
Dividends TTM: $2,202 (+$107 MoM)
Projected annual dividend: N/A

Total networth gain (loss): +$73,843

Investment allocation
Equities: 54.2%
Real estate: 24.4%
Cash: 21.2%

+++

Stock performance has been awesome for the last few months... Especially TSLA - it might hit my portfolio hard if it takes a dive as it is now 7-8% of my portfolio. Sometimes it's crazy to look at gains above 50K for a month while only spending a few grand. Dividends are down for the last few months compared to last year, but I'm sure they'll come back soon enough (within the next few years).

I'm still grinding... Job, cash flow, weight. Hoping to get smarter in terms of real estate investing. So far I'm still in the phase of initiating my real estate fund investments. When they are completely funded - hopefully by next year - they should increase my cash flow. In addition, I'm not far from doing a direct albeit small investment in real estate soon.

Danish government wants to raise taxes on stock gains and dividends.

They want to take more of the proceeds from people planning their life probably and saving for retirement/their life, in order to stop the increases in pension age for the majority (who usually will not save anything). Why punish people taking responsibility? Why reward the ones who does not?

By the way the pension age for a 20-something year old person in Denmark is expected to be 74. Guess this is what people are mad about.

Yeah, I saw that. In reality, they're probably not looking at the 12500 FIRE people, most of whom still have minimal capital, as much as the 90000+ business owners who derive their remuneration in both salary, stocks, dividends, and options with substantial input on that distribution in terms of their pay-package while making substantially more than the average wage/FIRE person. So I don't think this is targeting people who take responsibility for their own retirement as it is targeting the latter to squeeze out a few *illions and take some pressure off of age being the driving variable when it comes to retirement for the general population.

Note that the long tail of smaller accounts (smaa-aktionaererne) won't see any hikes. You need ~$8500/yr in dividend income before the rate that is proposed to increase kicks in. For Danish FIRE people on average it would decrease their capital income by 1-2%. I take more damage than that from insurance hikes alone.

My strategy for this (should something similar happen in the US) has been to "stay low and under the radar" and instead increase my safety by switching to lower yield companies with better balance sheets. Basically, while my NW has quadrupled, I've shifted my portfolio so my capital income in taxable accounts has remained about the same. Of course this just kicks the can down the road.---But hopefully long enough to a point where I just don't care anymore.

This is just one more reason to minimize the need for money outflows in your life. I really believe the next decade will see some fights between the haves and have-nots, in most western countries. The critical point here is to know the overton window of acceptable wealth, before you are considered "rich". If you can sustain yourself on capital within that window, you should be OK. If you go over by accident, it shouldn't really have a material impact on your life. If you NEED to go over just to live, you're potentially screwed.

@CL

I have similar thoughts sometimes. At the moment...stealth wealth helps to avoid conversations with bemused or envious humans. In the future....could be necessary to avoid violent confrontations.

A lot of tax can be saved by investing in zero/low yielding stocks if you do not need the cash flow and if you live in a high tax environment. I have a large position in BRK for the same reason.

Not related to above, my position in TSLA is now worth 10 x annual target expenses. I can easily loose or gain a whole year's worth of expenses in a single day just from one stock. For context my total investable NW is now at 210 x annual target expenses which is a new ATH.

Dude you were giving me anxiety 1k ago and you’re still giving me anxiety hope things work out with TSLA

210 years ... I believe that's a forum record!

buy, hold, sell ?

Are you planning to retire at some point. 210x expenses is mental good. I'm currently battling my expenses down to get to 100x by end of the year.

However no way I'll be working if I can achieve that.

Tesla is a weird one as I can understand some of the hype. I used to own some but sold it

Price now just isn't making sense. You can afford to sell some to reduce exposure. I guess your taxes on the sale will probably be a bit mental though.

11 x expenses in TSLA today

Yes I could sell some but as you mention the tax would be insane especially in this country. Also, I have 200 x expenses as a buffer on top. So I'm just gonna ride this rollercoaster to the end!

Oh Geez @thedollar I know PE ratio isn't everything but the PE on TSLA is over 1000 lol. Draw down a little at least? Your call. I haven't been following TSLA at all so I can't say otherwise if that growth is justified.

what's the deal with them, are they actually going to get into the sp500?

update: reading up on this and the internet seems to be full of bs theories:

- they won't get into sp500 because their volatility would be too high (since when is there a volatility requirement??)
- they won't get into the sp500 because they need to post "real" profits not just profits from the sale of regulatory credits (since when?)
- "they" won't include it just because (is inclusion in the index at someone's discretion? aren't there automatic rules?)

As a result, I am more confused than I used to be at the start. Do they have a date by which to decide if it's discretionary?

@ertyu

I think that second note might be true. Last 4 quarter profits have to have a net profit > $0.00. Last I remember this was a require be on the index. I just checked TSLA and they do indeed have a positive net profit past 4 quarters on income statement.

They do, though everyone knows that's magic. They sold regulatory credits to other companies, they sold inventory to Space X (reshuffling within the Musk system), etc. On twitter, some say that this doesn't count as "real profit" for the purpose of sp500 inclusion, and that they need to show "real profit" first. True/false??