meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

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meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

## Introduction

Hello! I am a long time lurker here, but now would like to contribute to the knowledgebase of this forum. Here is my story.

## Before we begin

Due to privacy concerns, I will mask country names with "A","B","C" etc. and actual amount of money with proportion to X instead. (X will be defined later on)

Note: All countries I mentioned are in Asia. Except the US. (duh)

## Short biography

I was born in a 3rd-world country in Asia. Let's call it "Home Country". I was fortunate enough to be raised in a fairly westernized middle-class environment, with plenty access to English books and media etc. Later on the ability to communicate in English helped me tremendously.

I graduated from a top local university with a STEM bachelor degree, worked a few years and got another degree from US public university (quite famous one) so that made getting a good paying job anywhere quite easy.

## Country Arbitrage

I moved back to [Home Country] to work for 1-2 years. But it has been my dream to work in another country. Took some time but I finally found a job in [Country B].

Now, here is the part that is related to ERE. [Country B] is a developed, 1st-world country with basically 2-times the salary and cost of living. I stayed there for a couple of years, actually saved 40-60% on average, but this is like saving 80-120% back in [Home Country] due to the 2X salary.

Most recently, I have moved from [Country B] to [Country C]. The reason?
(1.) I was bored and wanted a new country to explore.
(2.) My Significant Other (S.O.) was working in [Country C].

Now, [Country C]'s standard of living is comparable to [Country B]. However, it does not pay as well (plus I had a bit of a career "change" so now it's only "1.5X"). So I took a considerable financial hit but got a better deal on my personal life. I am still saving about 30-40% but the absolute amount is smaller.

## Life Goals

I subscribe to "absurdism" and "epicureanism" as a guiding philosophy. (hence my username). Basically for me it means that life has no intrinsic meaning to me and I just want to have some fun, experience novel things to pass the time.

I have a significant other but no children. Also both have living parents and a few distant relatives.

After reading the ERE book, I am pretty interested in the idea of resiliency, anti-fragility, "closing-the-loop" etc. So my goal is to get these going.

Financial -- Enough monetary buffer to take care of us and our family until death
Skills -- money-making, survival skills etc. This is probably more important than financial asset.
Social -- tight-knit community that can rely on each other. This is probably the most difficult for us. we are city people and we have never have much interaction with our neighbors.
Last edited by meursault on Mon Feb 25, 2019 2:53 am, edited 3 times in total.

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

## Detailed progress log

### Financial

Due to privacy concern, I will not talk in absolute monetary amount. Instead, I will refer to everything either as a percentage (saving rate is 30% etc.) or as a proportion of "X".

This [X] is an annual expense for one-person to live in our [Home Country]. It is pretty cheap to live and retire there. I have been tracking my expenses for a few years in [Country B] & [Country C] and decided my [X] should be roughly 80% of my current (avg) living expenses but excluding rentals.

The reason is that both S.O. and I intend to come back to [Home Country] for good eventually, since we have to take care of our aging parents (Asian filial piety and all). Additionally, in our [Home Country], we already have at least two houses paid off. (our parent's own houses -- we live with parents, they expect that. This is an Asian thing).

That said, even if my expense is much lower without renting, my X amount is still quite higher than Jacob's current expense (USD 7,000).

#### Summary of financial Assets

My own asset is all in liquid form. Currently I have the following split:
Cash: 48%
Stocks: 25%
Bonds: 19%
Gold: 8%

Yes, there is too much cash sitting there. I feel the current stock market is pretty overvalued so I am waiting...
My ideal split would be (Cash:10%, Stocks:50%, Bonds:25%, Gold:15%)

I have no liabilities.

#### Historical Saving Rate

Tracking monthly since 2013-10. Hope to get a consistent 50% saving rate while working full time, but currently it's pretty difficult due to high rental expense. I am living together with S.O. and we want to live in a great neighborhood -- you get what you pay for.
Overall we took a finanical hit but did not regret the decision.

Definition: This is saved amount vs actual income (tax deducted). (3 month moving average)
https://i.imgur.com/HToT1m7.png
Image

#### Historical Net worth

I plan to have at least 35[X] invested asset to be considered financially indepedent (~3% withdrawal rate). I have no plan to actually retired, just want to work on whatever I want, whenever, and hopefully still make some money off of it.


Chart: Net Worth (NW) as multiple of yearly living expense (1 person)

https://i.imgur.com/sY8XhKe.png
Image

To be continued....
Last edited by meursault on Sat Dec 02, 2017 9:31 am, edited 1 time in total.

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by wolf »

Great numbers! Your progress looks good and it seems that you need a few more months/years to FI.

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

It's time to update after 4 months.

### Non-Financial

- I have been working in the new company for 11 months, with quite good results so far. I have done around 6 consulting projects so far, with 4 100% success and 80% success on another 2 -- they are all in different domain, but all related to using AI/machine learning to improve the status-quo.

- I have been living in this new country, started getting used to how things work. I am still struggling with the new language (not many people speak English here -- both daily and in workplace). I got a lot better at listening comprehension though. Expect next year to reach somewhat " working professional" proficiency.

- Big thing in life happening next year is getting married. There is going to be a considerable adjustment in both living and in financial arrangements. Good thing is, we are sharing our expenses, so next year's expense might turn out to be even lower (per-capita wise) due to sharing stuff >> higher efficiency.

- Still the marriage ceremony will cost a ton here in Asia (due to the "face" culture). Plus I bought a few expensive toys during the last 4 months. So my saving is minimal. (only 20-30% range.... last year I was at 50%..)

Below are the financials.

#### Summary of financial Assets

Prev >> current split
Cash: 48% >> 49%
Stocks: 25% >> 28%
Bonds: 19% >> 14%
Gold: 8% >> 9%

Nothing changed much. Stocks are at an all-time high (ie. over-valued) so I expect some correction soon (even a crash -- we are due).
I wanted to buy some stocks and bonds but they are all too high, so I am starting to allocate more to gold.

will also take a look at bitcoin investing. Right now it smells like a tulip craze to me.

#### Historical Saving Rate

As per stated above, it really drops to 20-30%. Hope to do better next year.

Hi-res version: https://i.imgur.com/RJ8nPzC.png
Image

#### Historical Net worth

Net worth goes up from 28.4 years to 29.4 years of expense in the 4-month span. However, this was mainly due to investment gains.

Hi-res version: https://i.imgur.com/PtMRHSx.png
Image

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

2019! Oh my... it has been over a year. (14 months)
Here is my big update.

### Non-Financial

Two big things

- I got married around mid-year 2018. We still continue to do seperate finances, but share expenses. However, since legally we are the same household now, it makes sense to combine the net worth/assets etc. Fortunately my partner is frugal and saved up quite a bit, the hit to networth goal has been minimal

- Also around mid-year 2018, I've got a 100% salary raise. This has been a boon to my saving rate, I have gone over 50% without trying. Also, this year I am jumping to another company with similar pay.

- Thinking about buying apartment/house next year, mainly due to this country's lack of good investment options. We have been paying something like 50% of our expense to rental. (Our place is in a very good area though, easily top 5 in the city)

Notable

- My aunt passed away in 2018. It was really really sad. She has been a big, reliable anchor to all of us extended family, she has been good to me. She has done well in life, going from poor to rich and lived a good life. This has strongly reminded me that our time is indeed limited, no matter how much money you have.
Spend time wisely, minimize regret.

Below are the financials.

#### Summary of financial Assets

Prev >> current split
Cash: 49% >> 56%
Stocks: 28% >> 23%
Bonds: 14% >> 11%
Gold: 9% >> 11%

Still waiting for that correctiong / crash / recession. I still think the stocks are way overvalued and interest rates are too low.
My investment performance this past year were not great, but still above zero pct. Inflation slowly eats at me though.

The bitcoin has tanked, no surprise there. I didn't get in, just watched from the sideline. My friends lost substantial amount of money.

#### Historical Saving Rate

2018 is good at about 55%. would love to increase it to 60-70%, but anything above 50% is as planned.

Hi-res version: https://i.imgur.com/w8eGZqT.png
Image

#### Historical Net worth

Net worth went down to ~27 years then got back up to 29.6 years of expense. This is due to 2 things:
1. marriage, combining assets/expense (conservatively I use 2X of per-person expenses, without accounting for sharing efficiency)
2. I put in inflation (1.5%) adjustment for the whole graph, with 2013 as index. Therefore the numbers are lower than the previous post

Hi-res version: https://i.imgur.com/0y1aMyu.png
Image

2Birds1Stone
Posts: 1596
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by 2Birds1Stone »

Looks like you are FI by most measures.

Is inflation very high in your current country?

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

2Birds1Stone wrote:
Mon Feb 25, 2019 12:39 pm
Looks like you are FI by most measures.

Is inflation very high in your current country?
Hi @2Birds1Stone,

My current country [C]'s inflation is in fact quite low. However, most likely we will move back to [Home Country] which has higher inflation, hence I use the latter's long-term discount factor.

I like to be a bit conservative so I am aiming at about 33-40 years of expense saved as FI goal (<3% SWR). Right now I don't feel very (financially) secured, just comfortable. Maybe that's just lack of confidence in my money-making/survival skills. :D

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

End of the year 2019 update. (~10 months)

### Non-Financial

- Not much to say here. I got lazy during the middle of this year (mostly due to work fatigue) and didn't do much.

- Current company has become unstable and now starting to look for new job again. It is not a good feeling. I will aim to transition to remote/freelance work in a couple of years.

Below are the financials.

#### Summary of financial Assets

Prev >> current split
Cash: 56% >> 55%
Stocks: 23% >> 26%
Bonds: 11% >> 9%
Gold: 11% >> 10%

same condition as beginning of the year. Everything seems overvalued.
Sitting on a pile of cash. Gold part gain about 10-15% though.

Bought a few stocks that would either do well in recession, or robust to it.
healthcare stocks seem very forward-looking, matching well with future negative cash flows when I get older.

#### Historical Saving Rate

2019 saving rate is around 57%. (vs 2018 55%)
It is difficult to increase saving rate when living together with wife.
Not that she is spending much, but going extremely frugal is not good for relationship.

#### Historical Net worth

Net worth increased from 29.6 years to 31.9 years of expense. So every year I gain about 2 years.
- current asset portfolio is extremely recession-proof, but usual performance is below market standard.
- hope that when recession comes, I can get 1.3-2X return from buying undervalued assets.
- If I can increase the NW to ~40 yr of expenses, then full retirement is a GO. That should take around 4 years at the current rate.

Image
Hi-res: https://i.imgur.com/eEZVZpl.png

ertyu
Posts: 2893
Joined: Sun Nov 13, 2016 2:31 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by ertyu »

In sort of a similar situation here, from one country, working in a second one, etc. You sound pretty well set. How's the plans re: kids?

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

ertyu wrote:
Tue Dec 10, 2019 5:57 pm
In sort of a similar situation here, from one country, working in a second one, etc. You sound pretty well set. How's the plans re: kids?
Hi ertyu,

No plan for kids. However, if we happen to have one, then I'd probably just modify the plan a bit, be more frugal, work longer etc.
Most important is to move to child-friendly country in terms out environment/cost.

if you have a journal, would be interested in learning from your experience regarding two-country situation.

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

Mid-to-Q3 of the year 2020 update. (~9 months)

### Non-Financial

- COVID-19!! What to say, other than it brought both good and bad things. (see below)

- Got back to the previous company. Got ~30% salary increase (with a lot more responsibility... what I wanted though). Then because of COVID, I got to WFH all the time, basically it's a remote work! I am quite happy with this actually. (My partner also got the WFH deal).

- However, it's a bit depressing / stressful to have to be careful all the time when going outside, avoiding people. (We live in Asia where people are really serious about this). Traveling anywhere has been effectively halted. We both are naturally a hermit so it doesn't effect us that much, but still quite a bit.

- Another thing we found out, our home is way too small for two people to stay 24 hours (and work in it too!). We plan to move out soon, but to find bigger place near here is tough (with high cost)

Below are the financials.

#### Summary of financial Assets

Prev >> current split
Cash: 55% >> 69%
Stocks: 26% >> 20%
Bonds: 9% >> 9%
Gold: 10% >> 3%

So... COVID is a bit of a game changer, here's what happened
- around early March, stocks tank, GOLD up 30%+, so sold a bit of that.
- also sold all tech stocks, gonna pickup later after they finish plummeting
- (local country) govt. bond index is super profitable now since the rate plummeted. happy holding it.
- picking up some drugs / medical equipment stocks for fun
- (local country) stock indexes still down, just keep buying DCA
- around July, sensing that Tech firms are robust under COVID, bought back all the FAANGs incrementally.
- around August (now), Tech keeps going up, smells like bubble-valuation. What to do?!

#### Historical Saving Rate

2020 saving rate is around 66%. (vs 2019 57%)
With the big salary increase, it's very easy to save over 60%.
Surprisingly, COVID made me spend much less! (~10% down!)
- didn't go out to eat very often
- didn't find a need to buy things (because no space at home...)
- considering that the rent is ~40-50%, my variable spending is down by over 20%!

#### Historical Net worth

Net worth increased from 31.9 years to 34.2 years of expense. Every year I work, I gain more than 2 years.
- current asset portfolio is extremely recession-proof, but usual performance is below market standard.
- recession still... hasn't come? at least for US stock market, it's back to its high. Normal economy definitely is in recession though.
- full retirement planned at NW of ~40 yr expenses. But actually remote work is almost like half-retirement. maybe in the future I can negotiate for a position with less responsibility, a bit shorter work time per week (15-20 hr would be awesome!)

Image
Hi-res: https://i.imgur.com/eAC1U8B.png

Image

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

Q1 of the year 2021 update. (~9 months)

### Non-Financial

- COVID-19 is still continuing in full effect worldwide. I expect another year until we return to normalcy. maybe longer?

- I permanently WFH and go to office once every 1-2 months. It has been... interesting. with my small space at home and two people working at the same time. and also staying inside for 90% of the time. it has been .... a bit tormenting. I realize even for me (a full-blown introvert) needs some outside time.

- The company has gone through another restructuring, and I am too old for this shit. It's sad that most of the people I trusted had decided to leave the company. Now I am working just for money sake.

- One good thing that came out of this is that, with the new arrangement my new projects doesn't deal with customer directly anymore. So I just manage internal politics and survive for another day.

- I am going to train up my skills, things mostly related to ability to do remote work stuff. In the next 2-3 years that would be my plan. Is there a management-type work for remote working, I wonder?

Below are the financials.

#### Summary of financial Assets

Prev >> current split
Cash: 69% >> 48%
Stocks: 20% >> 47%
Bonds: 9% >> 3%
Gold: 3% >> 2%

- After a year of COVID, I took in more money in one year than in the past 5 years.
- Now I put most money in stocks. a tiny portion in Crypto-related stock.
- still have 50% money in cash.... due to it being store in different country. maybe I should look into investing that part too.
- Bond (Index) has been profitable when I sold it off. Maybe I will buy again when it becomes cheap.
- Ditto for GOLD

#### Historical Saving Rate

2021 saving rate is around 50%. (vs 2020 66%)

- the main reason it decreases is because I just paid a one-time fee for rental renewal contract. (agents, insurance, other related fee).
- I was thinking of moving at the beginning of the year, but the calculated cost of moving is roughly 5-6 times the monthly rent at least. so I said screw it and stay at the same place (central location but small space)

#### Historical Net Worth

One big note:
I adjusted our expected future living expense up by 20%. I realized the first estimate was too ... barebone for our taste, so I put a bit of a buffer. Actually this might be overkill, but the expense is now at least 80% higher than the average hometown city "A" household expense statistics.

Oh well, who knows what will happen in the future, so better have some buffer. On a side note, the new living expense is still 20% lower than our current city ("C")'s average living expense. So we can, in theory, choose to stay here as well -- just have to be very frugal. (It's the top 10 most expensive cities in the world)


Net worth increased 15% in 8 months (2020-08 -> 2021-04), thanks to investments. Every year I work, I gain more than 2 years.
- Since the living cost adjustment-up, the NW becomes 31 years of expense. If it were the previous cost, it would have been ~37 years of expense.
- Full retirement planned is STILL a NW of ~40 yr expenses. I do wonder though if my ability is enough to find new remote work jobs after retiring (part time, of course). I am getting old and being in Tech, ageism is strife.


Image
Hi-res: https://i.imgur.com/JcbMQvJ.png

Image

meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

Q2 of the year 2022 update. (~15 months)

### Non-Financial

- COVID-19 is being normalized. people are returning to the office, not but fully. the best for me would be a flexible schedule, with 1-2days a week at office.

- I have just switched to another job at another company. I wanted to quit already half a year ago due to extreme difference in company vision/execution, but been waiting for my permanent residency submission result. now I have it, and so managed to get out quickly.

- now there are quite a few things to think about in 1-5 years term. early retirement? having a child? moving back to city "A" to take care of aging parents? so many stressful and life-changing decisions, I hope I have a strength to pass this decade without much... scarring.

Below are the financials.

#### Summary of financial Assets

Prev >> current split
Cash: 48% >> 76%
Stocks: 47% >> 20%
Bonds: 3% >> 2%
Gold: 2% >> 2%

- Earlier this year at Jan/Feb, I felt that the market is nearing the next cycle / collapse, so I pulled most of my money out into cash.
- Crypto-related stock performed badly, I lost almost 50%, so just cut the loss.
- no change for bond. maybe when the interest rate hike is done.
- GOLD has been falling, near my breakeven point. If it goes down further I will DCA in.
- I opened a stock brokerage account at my current city ("C"), since we have substantial savings that could earn some yield. I felt safer investing here after I got my permanent residency.
- I am now researching for a defensive stock portfolio. has been buying some food producers, defense-related firms, and BRK. will continue to DCA in as the market falls.

#### Historical Saving Rate

2022 saving rate is around 65%. (vs 2021 50%)

- working remote and not going out much... the saving rate shot up automatically
- now that I got a PR and got a new job, thinking of moving to bigger space. I was considering buying a house but seems the market at the current city "C" is still too overpriced. so will look at renting.

#### Historical Net Worth

Net worth decrease slightly from 30.9 years to 30.7 years of expense (2021-04 -> 2022-07)
- The main culprit is the USD dollar strengthening. the city C's local currency, which I am earning the main income, has weakened by a lot. The standard currency I used for the graph is from city "B", which does not weaken as much as the C's currency. in real terms I am actually at 32+ years of expense.

- in previous update
Full retirement planned is STILL a NW of ~40 yr expenses. I do wonder though if my ability is enough to find new remote work jobs after retiring (part time, of course). I am getting old and being in Tech, ageism is strife.
- this is still true, and I also changed into a less technical/managerial type of jobs. I am not sure if that can be done fully remote (also I did just that for the past 2 years), but the skills/experience I got is definitely more general.

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meursault
Posts: 18
Joined: Sat Jul 29, 2017 3:57 am

Re: meursault's journal (ERE in Asia, geographic arbitrage, personal and social capital)

Post by meursault »

Q1 of the year 2023 update. (~10 months progress)

# Highlights

- Main currency tanked 30% against USD. portfolio still holding.
- Having children decision
- moving back home decision

### Non-Financial

- COVID-19 is not talked about anymore.

- I have been working in this new company for almost 1 year. Plus: excellent people, impactful jobs. Minus: too much work, too few people. Everybody over-worked (including CEO), and sometimes I gotta do the work I hate... if it does not get better I probably need to adjust somehow.

- Wanting to have a child. Big decision that will impact everything. Future is now totally unknown, I must train myself to not think too much ahead and stress myself.

- Parents getting old. I am thinking of moving back to origin country "A" for being near them. This also ties to having a child decision. Either country "A" or "B" is much closer in distance than the current country "C".

Below are the financials.

#### Summary of financial Assets

Prev >> current split
Cash: 76% >> 73%
Stocks: 20% >> 20%
Bonds: 2% >> 4%
Gold: 2% >> 3%

- My cash reserves (all countries) have weakened substantially against the USD. Especially the country "C" that I am living in, it tanked 30%+. This is problematic because (1) I am earning income in that currency, (2) this country imports a lot of energy and food, therefore everything is getting much more expensive. (10-50% increase in price)

- I bought a few defensive stocks -- food producers, basic chemical producers, conglomerates. they have done extremely well, with unrealized gain of 50%+. should have bought more...

- I will start ramping up bond buying substantially. since current USD treasury yield is ~5%, it pays more than a lot of companies' dividends! might increase proportionally to 30-40%.

- keep GOLD proportionally same.


#### Historical Saving Rate

2023Q1 saving rate is around 45%. (vs 2022 65%)

- The new job back-loaded my annual income with sizable bonus coming in December. so monthly income in most months are slightly lower than previous my job last year. Therefore, with the same amount of expense = lower saving rate.

- in March, got hit with a housing renewal contract fee. essentially about 1-2 months worth of rent. so excluding that the saving rate is probably ~50%.

#### Historical Net Worth

Net worth increase slightly from 30.7 years to 31.3 years of expense (2022-07 -> 2023-04)

- The main culprit is still the USD dollar strengthening, like last update. it has stabilized somewhat. I allocated 15-20% of my cash to USD for hedging.


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